Why do Full Tilt and Poker Stars have a monopoly on the poker site market? In my last post I talked about how poker sites are not maximizing their revenue effectively. Now I would like to address all the haters saying how it’s not fair that there’s very little legitimate competition between poker sites and how the players are getting price gauged by the few sites with all the market share because of the high cost and legal barriers to enter the market. Well I have news for you all.
This is how the internet works. Just about every single online company that is successful at an international level has a complete stranglehold on their market.
Just think, where do you go for search engines? 86% of the world goes to google.
Where do you go for internet browsers? 80% of the world goes to internet explorer or firefox.
Where do you go for an operating system? 90% of the world goes to windows.
Where do you go for video sharing? 90% of the world goes to youtube or vimeo.
Where do you go for social networking? 90% of the world goes to facebook (graph is a bit misleading as it lists twitter and youtube as social networking competitors)
Where do you go for online poker? 90% of the world goes to Pokerstars or FullTilt
source: pokerscout.com
Where do you go for online books? Amazon. Where do you go for online auctions? Ebay. Where do you go for online money transfers? Paypal. Where do you go for online video rentals? Netflix. I could go on and on.
In all of these markets 90% of the world market goes to one or two companies for that service. Before you start getting all depressed and angry about how we’re being price gouged left and right by all these monopoly internet companies the good news is just because a certain company is at the top now does not mean they will remain there. Netscape used to be the market leader in online browsers. Yahoo used to be the market leader in search engines. Myspace used to be the leader in social networking. Partypoker used to be the market leader in online poker. Products inevitably get better over time. If they don’t, a competitor’s product does and the original company dies. Online poker is still in it’s infancy and will no doubt get better with time, but complaining about lack of competition is to be ignorant of how the internet works.
The tendency online is for a single site monopoly: Amazon, Google, eBay. In the case of poker, I think Full Tilt is starting to fall farther and farther behind Pokerstars.
Yeah, not just the internet though, the world. It usually is a monopoly but on occassion it can be a duopoly like in the case of Coke and Pepsi, or something like Visa and Mastercard which shouldn’t be but it is. Visa and Mastercard almost totally controls the card market and it just doesn’t seem to change. Like in the case of Wikileaks, we don’t like them, let’s cut them off.