gas prices

[Dauphin]

Originally posted by Kidicious
Dauphin,

I think you are assuming that an effective company is one which has low prices. I think that's not a good assumption.

I'm not assuming anything. I'm saying that profits and turnover are different things, and one does not have to lead from the other. You can create profit in two (simplified) ways, raising turnover or cutting costs.

[Kidlicious]

Originally posted by Dauphin


I'm not assuming anything. I'm saying that profits and turnover are different things, and one does not have to lead from the other. You can create profit in two (simplified) ways, raising prices or cutting costs.

That's what I said on the other page. The only thing i added is that they can often raise costs and prices.

[Drogue]

Originally posted by Kidicious
They pass those costs on to their customers just as an oil company would pass on the cost of a gas tax. I don't know what you are asking for.

You reckon businesses pass on Google advertising costs to consumers? Ok, let's take Google out of the equation, it now doesn't exist. Do prices fall? No, the reason being, that the only way Google gets any business is because they're providing more value to companies than it is costing the companies to use it. Firms simply advertise on Google as opposed to advertising elsewhere (as a recent article on craigslist pointed out - the invention of internet advertising means print advertising is losing out). Google undercuts previous advertising costs in order to get business, so companies are getting more bang for the buck. This, if anything, is likely to make them spend less on advertising than they previously did. So Google actually lowers the price of other goods, in providing a cheaper form of advertising for firms.

It's not like a tax, as Google are taking business from other advertising outlets, not increasing the costs of firms. Google, and other internet advertising, tends to have the opposite effect, and in decreasing the cost of advertising reduces costs, and thus (perhaps) prices.

[Adagio]

Originally posted by chegitz guevara
Take public transportation.

Not an option. I live 40 km from work. If I had to use public transportation I would have to go by bus (no other public transportation available here), which would take 1½ just to get to the city I'm working in. Then I have to walk for like 20 minutes to get to work. Almost 2 hours just to get to work and then again 2 hours to go home... not to mention the fact that at those early and late hours the bus schedule doesn't help me at all (1 hour between the buses). I'd have to leave home 5:30 AM and wont be home until 6-6:30 PM

[Kidlicious]

Originally posted by Drogue
You reckon businesses pass on Google advertising costs to consumers? Ok, let's take Google out of the equation, it now doesn't exist. Do prices fall? No, the reason being, that the only way Google gets any business is because they're providing more value to companies than it is costing the companies to use it. Firms simply advertise on Google as opposed to advertising elsewhere (as a recent article on craigslist pointed out - the invention of internet advertising means print advertising is losing out).

I'd like to read that article before commenting too much, but what I believe is that some companies will prefer to advertize on the internet instead, some will only advertise in print and elsewhere, while some companies will advertise on the internet as well as print and spend more on advertising total.

Google undercuts previous advertising costs in order to get business, so companies are getting more bang for the buck. This, if anything, is likely to make them spend less on advertising than they previously did. So Google actually lowers the price of other goods, in providing a cheaper form of advertising for firms.

It's not like a tax, as Google are taking business from other advertising outlets, not increasing the costs of firms. Google, and other internet advertising, tends to have the opposite effect, and in decreasing the cost of advertising reduces costs, and thus (perhaps) prices.

I doubt that this is the case. Google doesn't have to compete with print as much as you think. If google is an effective company and some advertizers prefer internet advertizing than google doesn't have to lower their price. It's very likely that google does everything it can think of to provide a different service than does print. This gives them power over their pricing.

Just a comment about what would happen if google didn't exist and whether or not prices would fall. I don't think that's the question. The question is whether we had an entirely different system where companies actually did compete with each other the way that they do in theory. In that case, google probably wouldn't exist and prices would indeed be cheaper.

[Drogue]

Originally posted by Kidicious
I'd like to read that article before commenting too much, but what I believe is that some companies will prefer to advertize on the internet instead, some will only advertise in print and elsewhere, while some companies will advertise on the internet as well as print and spend more on advertising total.

Which is correct, except that the latter doesn't mean they'll spend more (they could advertise less in print). Also the change is prices is quite clear - inflation has been low and stable for longer than at any other time in recent history.

The article's printed up on our business school noticeboard (Craig from Craigslist came to speak at the school, so it's there as background), so I've no idea if it's available online. I'll get the date/newspaper details next time I'm down there.

Originally posted by Kidicious
I doubt that this is the case. Google doesn't have to compete with print as much as you think. If google is an effective company and some advertizers prefer internet advertizing than google doesn't have to lower their price. It's very likely that google does everything it can think of to provide a different service than does print. This gives them power over their pricing.

Yes, but it doesn't necessarily impact whether advertisers spend more. And they don't.

Originally posted by Kidicious
Just a comment about what would happen if google didn't exist and whether or not prices would fall. I don't think that's the question. The question is whether we had an entirely different system where companies actually did compete with each other the way that they do in theory. In that case, google probably wouldn't exist and prices would indeed be cheaper.

Of course it would, but that would be impossible, so the point is entirely mute. The statement "Google charge too high prices" is contingent on there being a better alternative, an alternative where there are lower prices. Moreover, the point you stated earlier was whether Google charged artificially high prices, which has to mean higher than natural prices. What you're advocating is artificially low prices, since competition of that sort clearly can't exist naturally.

[Kuciwalker]

Why are any of you arguing that Google isn't overpriced? Can't we just accept that Kid's ideas are absurd and move on?

[Kidlicious]

Originally posted by Drogue
Which is correct, except that the latter doesn't mean they'll spend more (they could advertise less in print). Also the change is prices is quite clear - inflation has been low and stable for longer than at any other time in recent history.

In 2006 advertising increased by 4.1% and in 2005 it increased by 3%.

4.1% increase in advertising expenditures for 2006

3% increase in advertising expenditures for 2005

The craigslist article is correct but very little was taken from print actually. For example, local newspapers lost 3.3% while internet grew by 17.3%. Local newspapers is probably a larger base, but the point still stands that google is not reducing aggregate advertising expenditures.

Of course it would, but that would be impossible, so the point is entirely mute. The statement "Google charge too high prices" is contingent on there being a better alternative, an alternative where there are lower prices. Moreover, the point you stated earlier was whether Google charged artificially high prices, which has to mean higher than natural prices. What you're advocating is artificially low prices, since competition of that sort clearly can't exist naturally.

I believe that in the context of the OP that 'artificial' means that the company in question has control over it's prices.

edit: The article also says that newspaper has about 3x the share that internet has.

[Provost Harrison]

I think it is impossible to discern here what is excessive profiteering. However the nature of their response to changing oil prices are less subjective. They go up quickly with a price rise but come down slowly when they drop

[Drogue]

Originally posted by Kidicious
In 2006 advertising increased by 4.1% and in 2005 it increased by 3%.

4.1% increase in advertising expenditures for 2006

3% increase in advertising expenditures for 2005

The craigslist article is correct but very little was taken from print actually. For example, local newspapers lost 3.3% while internet grew by 17.3%. Local newspapers is probably a larger base, but the point still stands that google is not reducing aggregate advertising expenditures.

No it doesn't, you're forgetting that you don't know the counter factual. How much would advertising have risen without Google? I'd bet a reasonable amount more than 4.1% or 3%. But we can never know that.

Originally posted by Kidicious
I believe that in the context of the OP that 'artificial' means that the company in question has control over it's prices.

I don't. I believe the OP meant artificial as in "not natural", as the word means. As in alleging it was an abuse of market power, and involved anti-competitive conduct. Now, in oil, that may be the case. Google, however, isn't forcing it's price up artificially.

Companies always have control over their prices, the issue is whether it's a fair, competitive price or whether they're abusing their market power.

[Kidlicious]

After reading the opening post again I'll give you the second claim.

[Lul Thyme]

Originally posted by Dis


I'm sure this was a joke post.

I'll never give up my car. They will have to pry it out of my cold, dead hands.

You can have a car for certain things, and still use other means sometimes, as some people have pointed out.

[One_more_turn]

It's clear that internet advertising will sooner or later overtake every other medium. It's cost-effective, it's intelligent, and the internet will become the most commonly used medium by humans.

[One_more_turn]

Why do OPEC's oil reserves go up, while everyone else's go down all the time?

OPEC's oil reserves have never been audited by independent 3rd party.

Can you trust OPEC's corrupt, inefficient, and oligarchic governments?

But $5 gas will finally usher the next level of energy revolution!

No pain, no gain.

The question is, how do you profit from this development?

Smart people always take advantage of ignorant ones.

Don't be the ignorant ones.

[Zkribbler]

I don't think it's an OPEC problem. I think it's a refinery problem -- real or manipulated.

Originally posted by One_more_turn
The question is, how do you profit from this development?

Buy stock in Exxon...or better yet, Halliburton.