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Google responds to Microsoft's Yahoo! takeover bid

Google responds to Microsoft's Yahoo! takeover bid

Google believes that Microsoft may try and monopolise the Internet if the Yahoo! takeover bid is accepted by Yahoo! and then approved by regulatory authorities.

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.

16 Comments

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cjoyce1980 4th February 2008, 15:02 Quote
I like google, but talk about the pot calling the kettle black!!! Didn't google buy youtube and also have a large stake in myspace?!?
oasked 4th February 2008, 15:36 Quote
Ditto. Google have no right to complain in the slightest considering their power (i.e. monopoly) in their market.
KillaHead 4th February 2008, 16:20 Quote
I'm just tired of everyone yelling monopoly every time Microsoft attempts to do something. At this point all this is (as far as I can see) is an attempt to more successfully take on a competitor. Google's response just appears to be an attempt to maintain there dominate market position without a capable competitor.
steveo_mcg 4th February 2008, 16:25 Quote
Which of course MS wouldn't ever had done, MS has never levered its position to the detriment of its competitors. To be fair google has a point in some respects, with increased market share in the IM and email side of things and its dominant position in the OS market it could lever Google out of non core areas.
Tomm 4th February 2008, 18:09 Quote
It is a valid point though - I can't see this merger being a good thing for me, as an internet user. It probably won't affect me so I don't really care, but I just can't see Microsoft bringing anything helpful to the table.
koola 4th February 2008, 19:39 Quote
Google does make a good point, MS would take a very large segment of the internet traffic with this takeover. Thank goodness I'm with Gmail and most other Google services so this would not affect me directly.
KillaHead 4th February 2008, 20:22 Quote
That is my point Google will still be there and still command a sizable lead in the search market so Microsoft acquiring Yahoo although lessening the pool of players does not mean Microsoft is attempting to monopolize the search market they are only trying to better position themselves to compete at this point in time.
Tyinsar 4th February 2008, 21:44 Quote
600 pound gorilla, meet 200 ton blue whale
johnmustrule 4th February 2008, 21:54 Quote
OH NO! my web apps and my PC could finally run in unison with one login guided by the intelligent design of two superior companies. Oh the HUMANITY! Since when was Google the little man? Just yesterday I read Google is the #1 user privacy offender and tragically its the most used search engine too. Its also ridiculous to insinuate that any one company is not trying to be #1 all the time, I don't think MS or even our beloved bit-tech would say they aren't trying to get as much revenue as possible minus the cost of upholding decent business practices. Google needs some healthy, or maybe even overbearing? competition to get it back in line. Conflict creates better products, better services, better internet.
Cthippo 4th February 2008, 22:23 Quote
Quote:
Originally Posted by johnmustrule
OH NO! my web apps and my PC could finally run in unison with one login guided by the intelligent design of two superior companies. Oh the HUMANITY! Since when was Google the little man? Just yesterday I read Google is the #1 user privacy offender and tragically its the most used search engine too. Its also ridiculous to insinuate that any one company is not trying to be #1 all the time, I don't think MS or even our beloved bit-tech would say they aren't trying to get as much revenue as possible minus the cost of upholding decent business practices. Google needs some healthy, or maybe even overbearing? competition to get it back in line. Conflict creates better products, better services, better internet.

I saw that article and what they said is that Google is the "worst" for privacy not because they were doing anything evil, but because they could be really really evil if they ever decided to be. As for what they actually do with the information, it's been pretty benign. If you'll recall, they were the only one with the cajones to tell the government to piss off.

Speaking of the government, it is (or should be anyway) their role to act as a foil to the capitolistic imparitive of industry. You're right, Google and MS and yahell all have a duty to make money by any means necessary. It's the government's job to oversee this and make sure that the public's interest is maintained.

Personally if this goes through I'll probably switch to Gmail, despite having been with Yahoo for over a decade now. It's really going to depend on how much MS mucks things up.
Tyinsar 4th February 2008, 22:53 Quote
Quote:
Originally Posted by Cthippo
Personally if this goes through I'll probably switch to Gmail, despite having been with Yahoo for over a decade now. It's really going to depend on how much MS mucks things up.
You and millions more I'm sure (myself included). I must say that prefer the iGoogle front page (despite its silly name) to Yahoo's "look at what Brittney had for breakfast" page anyway.
completemadness 4th February 2008, 22:58 Quote
As he said, Yahoo and MS are 2 of the biggest Portals on the web (i don't know if you count Google as a "portal" - tough choice)

Although Google is very popular with its search, its Email was locked for a long time (well, invite only) and i think a substantial number of older users have other email accounts (hotmail, yahoo, etc etc) rather then new fangled Google ones (i bet lots of people have both as well)

So all in all, Google doesn't have a monopoly on search engines, Microsoft doesn't really have monopolies on the Internet
But, if Microsoft bough Yahoo, what difference would it make, would it be good for competition, standards, users and the Internet as a whole
DXR_13KE 5th February 2008, 01:24 Quote
google may be right.... but only time will tell.....
Ninja_182 5th February 2008, 08:45 Quote
What happens to the BT-Yahoo thing, I assume BT just lose the Yahoo portion to MS? Im not a fan of any large company buying out another large one, I dislike nVidia strongly for it and that was years back. It takes years to make a company as big as Yahoo. If larger companies keep buying eachother out there will be a mass of small and generally useless startups and one or two dominating companies. They will dictate what happens, the small ones will just get dragged along.

The Google buying Youtube thing I do not see as being a problem as they both operate as two separate entities doing different things, I cant see that happening with MS-Yahoo, I think Yahoo will just get phased out with Microsoft gaining the customer base.
Paolo 5th February 2008, 17:53 Quote
I have a question - why does Yahoo need to consider *any* offer - either from Microsoft or from their recent talks with Google (http://www.reuters.com/article/ousiv/idUSN0362915520080204).

It would seem that Yahoo are financially stable as they are and their shareholders see this through speculation about MS undervaluing their share price, what's the problem?
koola 5th February 2008, 21:23 Quote
Quote:
Originally Posted by Paolo
I have a question - why does Yahoo need to consider *any* offer - either from Microsoft or from their recent talks with Google (http://www.reuters.com/article/ousiv/idUSN0362915520080204).

It would seem that Yahoo are financially stable as they are and their shareholders see this through speculation about MS undervaluing their share price, what's the problem?

Dude, it's a hostile takeover as in when another company offer x amount above the share value and pursue it until the share holders sell.
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