Google responds to Microsoft's Yahoo! takeover bid

Written by Tim Smalley

February 4, 2008 | 14:24

Tags: #anti #anti-trust #bid #blog #buy #competitive #legal #offer #questions #takeover

Companies: #google #microsoft #yahoo

There’s no doubting that last week’s biggest news was Microsoft’s $44.6 billion offer to buy Yahoo! and it wasn’t going to be long before a response came out of Internet archrival Google.

Speaking on the official Google blog, David Drummond—senior vice president of Corporate Development and Chief Legal Officer for the search giant—questioned the legality of such a move in what came across as a very defensive statement.

He started out by praising the openness of the Internet “[it’s] what made Google—and Yahoo!—possible,” he said. “A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It’s what makes the Internet such an exciting place.

Microsoft’s hostile bid for Yahoo! raises troubling questions,” Drummond claimed. “This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the Internet: openness and innovation.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets,” Drummond continued.

He said that the combination of Microsoft and Yahoo! would result in “an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet.

Drummond elaborated further by asking whether a Microsoft-Yahoo! combination could “take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors’ email, IM, and web-based services?

The questions asked definitely give some food for thought on the potential future of the Internet, but one can’t help but think that Google is being overly defensive in its statement. Even if Microsoft did buy Yahoo!, I can’t see the two catching up with Google in the world of Internet search—especially when you consider the search giant accounts for almost 60 percent of all Internet searches—and I’m not even sure if the combined company would be able to catch up with Google on the advertising front either.

We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first—and should come first—as the merits of this proposed acquisition are examined and alternatives explored,” Drummond added.

The last point he makes is, without doubt, an important one – do you think Microsoft’s proposed Yahoo! takeover could be bad for the Internet, or is a bit of competition for Google a good thing? Do you believe that Microsoft may attempt to monopolise the Internet if the bid was accepted by Yahoo!, and then the authorities? Share your thoughts on the matter with us in the forums.
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