The Dynamics of Competition in the Internet Search Engine Market
Neil Gandal, Tel Aviv University and CEPR
July 11, 2000
Abstract

Search engines hold the key to helping consumers access the wealth of information on the web. In this paper I examine the evolution of and competition in the internet search engine market. The goal of my analysis is to examine whether early entrants benefit in the long-run from their first-mover position in internet markets. I and that while early entrants (Yahoo, Lycos, Excite, Infoseek, and Altavista) still have an advantage, the pure \brand elect" advantage has been declining significantly over time. Yahoo has maintained its leadership position by providing a superior product. The success of a wave of recent new entrants suggests that entry barriers are still quite low in the internet search engine market.

I am grateful to Paul Geroski, Shane Greenstein, Jose Mata for many helpful suggestions and comments.


Keywords: Internet, Search Engines, Entry, Empirical Study.


JEL Classifcation Numbers: D43, L86.