MSFT walks away from YHOO: The antitrust connection

It’s interesting that such a large part of Steve Ballmer’s letter giving up on the Yahoo deal focused on the antitrust implications of Yahoo’s deal with Google. In four separate bullet points, Steve explains Microsoft’s “particular concern” over the arrangement: undermining Panama, harming engineer retention, giving Google even greater dominance over search advertising rates.

As for the antitrust concerns, Ballmer said:

It would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.

Can you imagine Bill blinking at such a thing? No, as Steve Lohr explores in the Times, the new Microsoft is gun-shy when it comes to antitrust matters.

“Microsoft’s pursuit of Yahoo and its antitrust troubles have the same root,” said Timothy F. Bresnahan, an economist at Stanford University and a former Justice Department antitrust official. “The future of mass-market computing is not the personal computer.”

After all the Netscape antitrust litigation in the U.S. and Europe, Microsoft just doesn’t have the stomach to pull against Google the bundling tricks it used in the old days.

“Microsoft’s pursuit of Yahoo and its antitrust troubles have the same root,” said Timothy F. Bresnahan, an economist at Stanford University and a former Justice Department antitrust official. “The future of mass-market computing is not the personal computer.”