A Study On Market Competition Among Three Major Portal Sites In China

In China and even in the whole world, website has become the fourth medium after broadcast, television and newspaper. Today, when information economy develops rapidly, website and network have become the major operating pattern of information economy. In the network industry, the problem of market competition and monopolized industry organization still exists. Under certain conditions, monopolized market structure is superior to completely competitive market structure in efficiency. However, website is the leading manufacturer of network industry, so its industry organization in the monopolized market structure has the tendency to benefit the whole society's welfare.The paper takes the SCP paradigm in the industry organization theory and the theory of"Chicago School"as the theoretical basis, and mainly takes Sina, Netease, and Sohu, the three portal sites, as the study subject. It makes an analysis on its market structure, and studies the efficiency problem of enterprises in the structure of oligopoly market. On the basis of summarizing the analysis on industry organization theory of network industry, the paper first analyses some features of comprehensive portal sites which differentiate from traditional industries, which include network effect, lock-in effect and increasing returns resulted from the special cost structure of information product, etc. Then, from the three factors, market concentration degree, product difference and entering barrier, the paper measures the market structure of the comprehensive gateway industries, and finds that the comprehensive portal site industries in our country belong to the structure of oligopoly market. In the type of this market structure, the intensity of the competition between the three portal sites hasn't decreased. The differentiation of products is one of their major competitive behaviors, which is also the major way to establish and consolidate their own competitive abilities. Based on this, the paper mainly borrows the method of network value assessment, and analyses the cost and benefit of the three portal sites from the aspect of sales achievement and efficiency and on the basis analyses their core competitive abilities respectively. Last, the paper briefly points out some problems and challenges of the three portal sites as the traditional portal site.