Monopoly search is bad because it is easier to game. People have gotten so good at manipulating Google rankings, that there is room for competition. Merely being small has some inherent advantages. Being bigger and more popular can be inherently bad.
This video has Thiel's comments:<p><a href="http://bigthink.com/series/62#!selected_item=4845" rel="nofollow">http://bigthink.com/series/62#!selected_item=4845</a><p>He starts at 8 mins in, and although the whole video is 2 hours long, he makes a bunch of major points in the first 3 to 4 minutes of his talk, after which he answers questions for 3 to 5 minutes.<p>His central point is that there is a lot of potential value in getting the fixed costs of the search business down, and that he would prefer to invest there, rather than in playing the zero sum game of trying to take away make share in the $25 Bln search business.<p>Also worth noting: anybody who can lower the fixed costs of search by an order of magnitude is also going to be in a position to make money from businesses that have similar cost structures.
The idea that costs for a search engine go down with time is false.
Bandwidth, CPU, memory and disk sizes you have available to index and retrieve information do get cheaper. And this means they get cheaper for information-producers too. So the need to increase the amount of data you index eats away the decreasing cost of hardware.<p>Naturally this holds true for general search engines. Vertical ones are a very different beast. And I think Peter Thiel was not talking about specialized vertical searches like patent search.