Re: ``Nothing like a monopoly to get investors to cheer you on''

["Eric M. Bennett" <ericb@pobox.com>]

Brett wrote:

>At 10:27 PM 11/7/98 -0500, Charles Behney wrote:
>
>>Wall Street loves a Sure Thing. How can you make Linux a darling of stock
>>analysts?
>
>I don't know. However, Linux may (inadvertently) make Microsoft MORE
>of a darling of stock analysts. Why? Because Linux will prevent any new
>commercial operating system -- such as BeOS -- from being able to compete
>with Microsoft's offerings. Linux will compete with them for developer
>mindshare, for sales, and for capital. The result: Microsoft's position
>as the ONLY viable commercial option will -- perversely -- be strengthened.
>Linux will kill off potential competition for it.

Well, this is a good question for game theory, which attempts to analyze
this sort of situation.

Your conclusion is one possible outcome, but this is a complex situation.
If the two most dominant players concentrate on taking each other out, one
possible result is that the weaker competitors will be the overall
beneficiaries.  If Linux and Microsoft are the two most potent OS
competitors and they focus on killing each other, then the presence of
Linux may help companies like Be since Linux will be a distraction to
Microsoft (and vice versa--note how the Halloween documents seem to have
distracted some Linux folks from their usual goal of writing software to
solve a particular problem they have).

If we don't know exactly how each competitor views the others, and if we
don't know how each competitor will allocate its resources to deal with the
various threats it faces, we can't hope to predict the outcome.  (Even if
we do know, we probably still can't predict the outcome.)


I don't know if you've done any reading on game theory, but it's pretty
interesting.




--
Eric Bennett (http://www.pobox.com/~ericb/)
Cornell University, Field of Biochemistry
377 Olin Chemistry Lab

TIP: Buy Apple Computer
WHY: According to Microsoft, the big, bad, scary Macintosh-maker threatened
Bill Gates's poor little company in 1997.
-Advice from the dilbert.com financial pages