Having said that a merger between Microsoft and Yahoo! would
undermine the "underlying principles of the internet", Google is
reported to be trying to put obstacles in the way of the deal.
The Wall Street Journal reported yesterday that Google chief
executive Eric Schmidt telephoned Yahoo!'s Jerry Yang to offer help
in rebuffing the bid. Reuters reported that Yahoo! bosses were
considering an alliance with its rival.
Google and Yahoo! held talks towards the end of last year about
a potential alliance, and Reuters reported that Yahoo! management
is considering a return to those talks.
David Drummond, Google's chief legal officer, released a
statement denouncing the deal as the behaviour of a monopolist bent
on destroying the internet.
"Microsoft's hostile bid for Yahoo! raises troubling questions,"
he said. "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."
A merger between Google and Yahoo! is almost certain to be
blocked by competition regulators because the companies operate in
similar areas.
Analysts have even cast doubt on the sincerity of Yahoo!'s
attempts to find other partners or buyers for the business. Some
view it merely as a tactic to raise Microsoft's $31 a share bid
which executives think undervalues the company at a $44.6 billion
total.
Google's Drummond said that he feared what could happen if the
two companies merged.
"Microsoft plus Yahoo! equals an overwhelming share of instant
messaging and web email accounts," he wrote. "Between them, the two
companies operate the two most heavily trafficked portals on the
internet. Could a combination of the two take advantage of a PC
software monopoly to unfairly limit the ability of consumers to
freely access competitors' email, IM, and web-based services?
Policymakers around the world need to ask these questions – and
consumers deserve satisfying answers."
