Collaboration

Google weighs in on Microsoft purchase of Yahoo, Yahoo may look to Google for help

Google’s senior vice president and chief legal officer, David Drummond, said in the company’s blog on Feb. 3 that given Microsoft’s anti-competitive conduct in the past, coupled with its continued dominance in the technology industry, would threaten “innovation and openness” on the Internet.

Google’s senior vice president and chief legal officer, David Drummond, said in the company’s blog on Feb. 3 that given Microsoft’s anti-competitive conduct in the past, coupled with its continued dominance in the technology industry, would threaten “innovation and openness” on the Internet.

From the NY Times:

“Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” asked David Drummond, Google senior vice president and chief legal officer, writing on the company’s blog. “While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets.”

Yahoo declined to comment. Yahoo has said it is weighing Microsoft’s hostile offer and alternatives.

While control of Internet advertising dollars is an important consideration, it seems that Google is concentrating more on the issues of instant messaging and e-mail, contending that a combination of Yahoo and Microsoft would result in an “overwhelming share” of those markets.

But is this just Google’s way of getting back at Microsoft for trying to de-rail Google’s acquisition of DoubleClick?

From the NY Times:

Like Microsoft’s $44.6 billion offer for Yahoo, the Google-DoubleClick deal was announced on a Friday, and Microsoft lost no time objecting. By the weekend, Microsoft, working in conjunction with AT&T and others, had begun urging antitrust regulators to scrutinize the deal.Microsoft claimed that the Google-DoubleClick combination would reduce competition in the online advertising business and put too much consumer data into the hands of Google, raising concerns about possible intrusions into user privacy.

As that merger began to undergo review by regulators and faced inquiries from Congress, Microsoft, which itself had bid for DoubleClick but lost, remained one of its most vocal opponents. In September, Microsoft’s general counsel, Bradford L. Smith, for instance, told a Senate subcommittee dealing with antitrust matters that the deal would give Google “sole control over the largest database of user information the world has ever known.” And Microsoft filed some of the most detailed objections to the merger with the Federal Trade Commission, the agency in charge of reviewing it.

So, this could just be Google’s idea of a payback, or there could be other plans afoot. According to Reuters, Yahoo’s management is considering a business alliance with Google as a way to rebuff Microsoft’s hostile offer.

From Reuters:

Yahoo management is considering revisiting talks it held with Google several months ago on an alliance as an alternative to Microsoft's bid, which, at $31 a share, Yahoo management believes undervalues the company, the source said.

A second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.

According to Sanford C. Bernstein analyst Jeffery Lindsay, “the Microsoft bid of $31 is very astute” because it would pressure Yahoo management to take actions that could unlock the underlying value of Yahoo assets, estimated at upward of $39-$45 a share.

What is next? The blogsphere has been buzzing since the Feb. 1 announcement by Microsoft. Many people are afraid that Yahoo will disappear under Microsoft branding and popular sites like Flickr and del.icio.us will disappear completely or change so much that they will not satisfy the community. Whatever happens next, it is clear that Microsoft is determined to bring Yahoo under Redmond control. What do you think the best outcome will be?

More information:

Google, Microsoft trade shots on bid for Yahoo (Market Watch)

Yahoo struggles may be good news for Microsoft (TechRepublic)

Microsoft, Yahoo Combo Worries Web Users (PC World)

Statement from Brad Smith, General Counsel, Microsoft (Microsoft.com)

8 comments
Tig2
Tig2

It seems evident that each of the players here has strong feelings about who should win and, more importantly, what is to be won. But what impact does this have to technology consumers? Are we willing to allow Microsoft to continue to dominate? Or do you see the synergies between Yahoo and Google as the more likely result? And will Microsoft be able to consume a brand like Yahoo without changing it so significantly that users leave? All very interesting questions in a story that will continue to raise even more questions in the months ahead.

danield
danield

I have been using microsoft since dos 3.1 and it has always been less then it could have been. Now they patch it every week and a lot of times it change my settings so I have to change them back to the way I want them to be. The only thing that keeps me from changing to the alternative is the learning curve on something else. I like Google my self. They seem to do everything very well and have made so many things available the not only work but get better with time.

vhinzsanchez
vhinzsanchez

Same here...I've been using MS since the DOS era. MS is always leaving the house...doors locked but Windows wideopen. All those patches doesn't make sense. They should have release a stable version of Windows by now...they've been in the OS business forever. I've been trying Linux to no avail, no new things to do after installing Ubuntu. The learning curve that MS instilled in me sways me away from the penguin. I got no rant about Google and I have no taste for any toolbars either. The thing is whenever I use google apps or something, there is an option to reject the installation of these toolbars or atleast it is mentioned in the wizard that the toolbar will be installed.

Tig2
Tig2

I appreciate what you are both facing with the learning curve. I used and supported Microsoft products from before MSDOS and finally had to give myself the challenge- my current machine is a Mac. I think part of what mede it easy for me was a grounding in UNIX. I can get into terminal and work from the command line if needed although the GUI is easy to use and friendly. Still, I miss the sense of always knowing what to do instinctively instead of having a handy manual close by. With all the activity around Microsoft, Google, and Yahoo, I think that the Internet experience may be in for some real change. I just hope that it's change that we can live with.

david.wallis
david.wallis

personally id like to see microsoft get yahoo. i dont like google, its beginning to border on adware, im sick of google toolbars being installed without permission and other google crap that gets added to my browser. It seems to come bundled with every other piece of software at the moment..... not a google fan! their search engine is good, just could live without all the extra crap they try and force on your pc!

brian.mills
brian.mills

I've never had any problem with any google software getting installed on my system without me specifically installing it. Picasa and Googletalk both asked about installing toolbars, but it was simple to say no. I didn't ask for the Google search box that came with Firefox, but it's not obtrusive, can be changed to use another search engine, and is rather helpful. Personally, I'd rather see Yahoo and Google team up with some sort of alliance. I'm not a fan of Yahoo, but I'm even less a fan of Microsoft. I think the best scenario would be for Yahoo to remain its own independent company. If the deal to buy Yahoo goes through, I wouldn't put it past Microsoft to kill Flickr to promote their own photo service instead. Viva la innovation!

asgr86
asgr86

yahoo is good left alone

The Scummy One
The Scummy One

many pieces of SW recently come with the Google toolbar and other ad-ins. However there is usually an option in the setup to remove it, but in some cases there is not the option. Personally, I dont like having toolbars installed, just more crap to cause problems.