G+ Beneficial Unintended Consequences

A Battle that Everyone Wins por Steven Horwitz:

The beauty of competition is that it is how we find out what people want .. The only way they will know for sure is the market test ..

The broader lesson here is the importance of freedom of entry. Having had the market largely to itself for so long, Facebook may well have become unresponsive to users. Google’s ability to create a meaningful competitor is what will force Facebook to innovate, even if Google+ fails in the long run. This is why we need to be wary of complaints about firms being “too big.” If a firm like Google couldn’t leverage its size and unique market position to pose an effective competitor to Apple in the smartphone market or Facebook in the social network world, we would lose the competitive threat that keeps incumbents innovating.

The irony is that breaking up a large firm to avoid monopoly can enable monopolies elsewhere by removing that firm as a competitor. As the battle of the new century unfolds in the months to come, we should all celebrate that free entry and competition have their way and that we will all learn what people want in social networking. That’s a battle that everyone will win.