C. Dennis,
You ask "Yesterday's power-elite was GM and US Steel -- and they've done a horrible job of maintaining their power, haven't they?" The answer is "absolutely not." Considering the poor job they've done producing goods for market efficiently, these companies are doing fabulously well, so well, in fact that nothing but a good dose of hegemony can explain it. Capitalism is clearly not about accumulation in an objective marketplace (your take on Gates' supposed lack of market power was absurd), it is about getting the money and access to fund the next project. The competition for today's markets ended well before the close of business on Friday. It took place weeks, months and years ago.
The advantage that Microsoft gains from its monopoly position in the operating system market is not just about today's dollars. It means that the industry is subservient to the almighty Microsoft brand. Who is going to lend money to a company that is developing software to *compete* with Microsoft? You'd have to be insane. For all the complaints I hear about MS Word, I don't see a lot of alternative word processing packages being developed. Every legal secretary I ever talked to prefers WordPerfect. So what? WordPerfect doesn't come in the Windows '98 bundle and that is the end of the story. WordPerfect exists, sure, but try to raise money on the basis "I want my company to be the next WordPerfect." It's only a guess, but I'd say your phone will not be ringing off the hook. Meanwhile, every genius who can rub two lines of machine code together is begging the dear Lord for that call from Redmond. They line up, unbidden, to give Bill Gates their intellectual property. That, comrade, is hegemony.
What gives Yahoo! and Amazon.Com the power to raise billions in market capitalization? Profit? Sales? I don't think so. They have been anointed. Their dinky little operations have been Midas-touched by Wall Street, just like Gates and his crowd were by IBM (and, subsequently, Wall Street). Years ago East Coast banks wouldn't have considered lending to new media firms like DoubleClick. Now, those anointed brands are getting loans from the likes of Chase Manhattan. Is there a succession among big corporations? Sure. Is it somehow democratic and market-driven? It's as democratic as a royal family marrying a son or daughter to another royal family. The market demands something, some likely geniuses poke their heads up and the holders of access to the almighty dollar choose who will serve that market. The rest go hang themselves or sell out to whatever lower bidders are left.
The truth of capitalism is like Hollywood. There are thousands of scripts out there but, thanks to the blinding efficiency of the system, only a few will get made and only a few of those will deserve to have been made. Industry does not serve the market so much as it serves at the pleasure of the rich. Capitalist economies aren't guided by an Invisible Hand because, although the consumer will buy and even price what's available for sale, the Invisible Hand can't write the checks to get industry off the ground in the first place.
peace