Today in a blog (http://googleblog.blogspot.com/2008/02/yahoo-and-future-of-internet.html) Google general counsel David Drummond claimed Microsoft’s $44.6 billion hostile bid for Yahoo “raises troubling questions.”
“This is about more than simply a financial transaction, one company taking over another,” he wrote. “It’s about preserving the underlying principles of the Internet” openness and innovation,” throwing in Microsoft’s face allegations of possible monopolization and antitrust leverage onto “new, adjacent markets.”
“Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” he says. “Could the acquisition of Yahoo allow Microsoft – despite its legacy of serious legal and regulatory offenses – to extend unfair practices from browsers and operating systems to the Internet?”
Drummond expresses concern over the combined share of instant messaging and e-mail accounts that a merged Microsoft-Yahoo would have, urging “policymakers around the world” to question consumers ability to access competitors’ e-mail, IM and Web Services if the combination is allowed, urging that “alternatives” be “explored.”
Ironically when Microsoft announced its offer for Yahoo Friday it clearly indicated that it was meant to address the swelling dominance of Google in both search and online advertising.
And Microsoft isn’t taking Google mudslinging lying down. Its general counsel Brad Smith responded with a statement
(http://www.microsoft.com/presspass/press/2008/feb08/02-03statement.mspx) claiming that “The combination of Microsoft and Yahoo will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The alternative scenarios only lead to less competition on the Internet.
“Today,” he continues, “Google is the dominant search engine and advertising company on the web. Google has amassed about 75% of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65% search query share in the US and more than 85% in Europe. Microsoft and Yahoo on the other hand have roughly 30% combined in the US and approximately 10% combined in Europe. Microsoft is committed to openness, innovation, and the protection of privacy on the Internet. We believe that the combination of Microsoft and Yahoo will advance these goals.”
The only serious obstacle to Google acquiring DoubleClick is the European Commission’s ongoing review of the proposed acquisition, which is believed to be unlikely to stop it despite objections from Microsoft, AT&T and Yahoo as well as the privacy contingent.
Microsoft’s acquisition of Yahoo is also supposedly likely to clear the antitrust regulators though a long review is anticipated.