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Q1.
The rapid growth of the Internet use experienced in the recent past, with the incredible flow of information that has been brought by it has made it possible to conduct advertisements. It has led to the emergence of massive online advertisement by many brands as they are sure to reach a bigger number of clients. Most people nowadays surf the internet because of the many internet-enabled gadgets that are easy to own due to their low cost. In the recent days, it has become difficult use internet without seeing some form of online advertisement. Various ways are used for this purpose; this can be either visual display ads on websites, which works as either pop-ups or even pop-downs or the textual ads on search sites.
Little have doubts that online advertising has taken business away from the traditional modes of advertisement such as snail mail, newspapers as well as radio.
Many companies typically advertise in order to achieve one or more of several possible goals that they have set for themselves. Mainly, the advertisements are the main tools that help to inform, persuade, or even remind as well as to build brand awareness or brand loyalty. When successful advertisement is done, it can lead to increased sales and a reduction in the price elasticity of consumers demands for the product that is being advertised. The advertisement can increase the revenues and profits. The importance of the World Wide Web (www), the Graphical User Interface (GUI) and the Browser is of great concern.
In the early 1990s, the internet provided connections between sites as well as individuals at various sites that had information and resources that would proof to be useful to others.
There are many advantages of using online advertisement over the traditional media; one of its pros is the reduction of the costs that are incurred (Gaurav and Surender, 2013). As compared to other forms of advertisement such as television, radio and yellow pages, the online marketing is only a fraction of the amount used for the other media. Secondly, there is image engagement as online advertisement seeks to establish and maintain positive brand awareness through continued updates on their sites to maintain the peoples interest on the product. Thirdly, there is a real-time impact of online advertisement unlike the use of other traditional media where you could wait for long before realizing the advertisement influence.
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One of the core disadvantages of online advertising is that the marketing materials are available for anyone in the world to copy irrespective of the legal ramifications. The logos, trademarks, and images can be copied for commercial purposes. In the other media, copying of trademarks is not possible as they are based on paper media.
Q2.
When AT&T Company proposed its plan to acquire T-Mobile from Deustche Telekom, it would have become the large telephony company in the United States of America. The resultant market share would have been 43% of the total number of mobiles. This could have brought the general number of subscribers to 130 million. Technically, this would have made AT&T a monopoly in the industry.
This being the case; the deal should have undergone the regulatory review, and it was bound to be upheld by the Department of Justice together with the Federal Communications Commission. In reaction to the announced deal, the antitrust division of the Justice Departments ought to block the merger of AT&T Mobility and T-Mobile USA. When one scrutinizes the deal keenly, the purchase would have technically made AT&T the largest United States wireless carrier with a superior customer base. It would have adversely affected both its competitors as well as the consumers alike. With a large customer base, AT&T would have probably had the ease of exploiting the consumers unfairly. There was a likelihood of the prices skyrocketing. Equally, the levels of innovation will have been significantly reduced, and fewer choices will be left for the consumers and competitors. These were issues raised by the FCC and the Department of Justice (Randolph and Seth, 2011). In a bid to try and get an approval, AT&T was willing to lease part of its property in order to gain an approval from the regulators. But this did not convince the regulators either.
The spirit of competition is jeopardized when one seller monopolizes the market; in such case they will overcharge the consumers when they use their service. This was why the Department of Justice was keen to ensure that the merger did not take place as it would have had a lot of negative effects on the consumers and other competitors.
I, however, criticize FCC's assessment of competitive conditions in the advanced telecommunications market, which to a large extent, include the wireless mobile telephony market. Equally, the U.S. Department of Justice's wireless competition assessment does not fully reach the threshold for its justification. This report overemphasizes the market concentration indicators in the FCC's report, since the market concentration is a reflection of wireless market and the proposed AT&T/T-Mobile merger was basis.
Despite the existing caveat, this report nonetheless treated the static market share as the organizing principle of its analysis. It asserted that the concentration metrics shed light on the scope and scale of competition that would be eliminated by the transaction that was proposed.
