Standard Oil's Vertical Integration (1870-1911)
John D. Rockefeller built Standard Oil by controlling every stage of oil production—extraction, refining, transportation, and distribution. He acquired pipelines, railroad cars, and barrel-making plants, eliminating dependence on outside suppliers. By 1880, Standard controlled 90% of U.S. refining capacity through this integrated model.
Massive cost advantages allowed Standard to undercut competitors and dominate markets.
Antitrust prosecution broke company into 34 pieces in 1911, but vertical integration became industry standard.
Google's Intersect acquisition mirrors Rockefeller's logic: if you can't buy the input reliably, own the supplier. The question is whether regulators will again view such integration as anticompetitive.
