Google launches its 'let's annoy Microsoft' plan: Pings Yahoo and works regulators

Google launches its 'let's annoy Microsoft' plan: Pings Yahoo and works regulators

Summary: Google has reportedly reached out to Yahoo to thwart Microsoft's unsolicited $44.6 billion bid.


Google has reportedly reached out to Yahoo to thwart Microsoft's unsolicited $44.6 billion bid. And in case that doesn't work Google has already started working policymakers.

Simply put, the games have begun (Techmeme). Get ready for the FUD fest folks. As noted on Friday just a few hours after Microsoft went public with its Yahoo bid Google will play a big role in this saga (see blog focus).

For starters, Google is Yahoo's best defense if it doesn't want to be acquired by Microsoft. All Yahoo has to do is outsource its search to Google--a move that would be financially beneficial to CEO Jerry Yang and Co.--and it gives Microsoft second thoughts.

According to the Wall Street Journal and Reuters, Google CEO Eric Schmidt called Yahoo's Yang to offer help to fend off Microsoft. The motives are obvious:

  • Google would love to force Microsoft to pay more;
  • Google wants to head Microsoft off at the pass since a combined Microsoft-Yahoo could be a search threat;
  • Microsoft bitched and moaned about Google's DoubleClick acquisition.

While it's not likely that Google could get the regulators to swallow a Yahoo purchase the search giant can still raise a ruckus. Google could even bid for giggles--or help fund an effort to take Yahoo private.That latter point is important. What if Google helped fund a white-knight bidder? It would make total sense. And there would be a nice bonus--if Yahoo goes private the first thing the new owners would do is outsource search to Google.

For now it appears that Google is launching a two front war. First, Google wants to help Yahoo disrupt Microsoft. And if that effort fails Google is going to make damn sure regulators look closely at this deal.

The regulator spin has already begun as Google broke out the open Internet card. In a blog post Sunday, David Drummond, senior vice president and corporate legal offer said:

Microsoft's hostile bid for Yahoo! raises troubling questions. 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.

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? In addition, Microsoft plus Yahoo! equals 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. 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.

Talk about a game of Monopoly.

Brad Smith, Microsoft's general counsel, didn't mince words either.

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, Google is the dominant search engine and advertising company on the Web. Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65 percent search query share in the U.S. and more than 85 percent in Europe. Microsoft and Yahoo! on the other hand have roughly 30 percent combined in the U.S. and approximately 10 percent 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.

Add it up and you have a monopoly pissing match with Google and its search dominance in one corner and Microsoft and its Windows market share in the other. Pick your poison.

Topics: Government US, Browser, Google, Government, Microsoft, Social Enterprise

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  • Just like the presidential election--both sides stink!

    • Totally. Agree with the elections also. (nt)

      nt = no text
    • Obama

      I've worked with Barack and he's the real thing. How he got this far in such a corrupt system is unbelievable to me. He believes what he says and he hasn't been around Washington long enough to act like the rest of them. If you are going to vote, I know you don't know me at all, but I'm asking that you vote for him. He'll surprise you. Dawn
  • Why is this surprising?

    Now why is this surprising at all? Both google and m$ are profit oriented companies answerable to their shareholders, and they will do what it takes to get there.

    For those of you falling for google's "don't be evil" PR nonsense, good luck in life, and I have a bridge to sell you.
    • exactly!

      Google is far from the cutesy, nerdy, do-gooder many users think they are.
    • the bridge business is pretty good right now ..

      Y'know there's good money to be made reselling bridges if you know the right market - please send me your catalogue asap!
  • Now where ...

    .. have I seen tactics like this before , oh yeah Microsoft ...
  • desperate?

    No more so than MS. Both are giants trying to watch out for number one. MS is trying to catch up and Google is trying to keep their lead.
    • Support Google

      It about time someone went up against M$ and I am glad Google is the one doing it. I for one support Google efforts against M$, and I personally do not want to see Yahoo become another M$ property. It be a sad day for the internet when Yahoo becomes another M$ franchise.

      Lets face it, Yahoo offerings such as email is way better than M$.
  • No...

    Clearly Microsoft is the one who's desperate in this scenario -- remember, they're the one willing to pay 3x the stock value of Yahoo in order to have another one of something they already have and have had for a decade now (, anybody remember that one?)... Google is making a strategic move to prove that they're not just a young upstart company anymore. Microsoft has been the bully for a decade and a half, and if Google succeeds in thwarting them, guess who's not so tough anymore?
    • uhm, yes...

      Google is the desparate one here. Not only that they are filling the role of immature child perfectly well too.

      Have a nice day.
      • Duh!

        "Google is the desparate one here. Not only that they are filling the role of immature child perfectly well too."

        Google are desperate? I think you'll find that Microsoft are the desperate ones, trying to delay the collapse of their monopoly because of disaffected and tired [users/consumers].

        Would you say that MSFT.O acted as an immature child over OOXML certification? I think that desperate control-freak money is all that matters technology killing losers is more appropriate.

        The trouble is, if the IT sector crashes, we'll see darling Penelope and dear old Rupert extending their control over the food we eat. Godda make their money from nothing somewhere.
        • And your a moron, just like the rest of the fan boys

          You keep trumpeting ms while the rest of us find much better products elsewhere.

          Want to know whats different about google and MS? The products everyone likes from google are developed by google, microsoft bought most of the crap that they sell now. They werent, just like you arnt. Good enough to compete on your own.

  • nobody clicks on ad-sense ads anmore.. what'd you expect

    and with the combined new ican rules.. do refunds on domains, only spells trouble for google.
    • Yeah that is crap

      I am an owner of a number of Web properties. Adsense pays me well and this is the reason why Google is the best company to be at the helm of the Net, they share their profits and tech with smaller players. Adsense is also good for consumers. It is unobtrusive and useful.

      Microsoft would never share their profits with other websites because they are too selfish and they would not be good for the openness of the Web too.
      • Insanity

        Its got to be contageous. How does google share their profits with you? How is their pay for click any different than anyone elses?

        Google has already shown their cards in a number of confrontations with other established entities. ALL companies are about market dominance and profit. Thats how it SHOULD be. It is up to govt and society to decide where to draw lines around them.

        When you have legions of blind ignorants slavishly loving one company (Google) while mindlessly despising another (MSFT) you have a huge problem in perception.

        I agree with the guy above selling bridges. Anyone who feels Google is somehow a charity is really out of their mind.
        • well, Google's slogan is "Do no evil"...

          • "Do no evil"

            Hey, they stole that from doctors !! :-)
    • tired of web pages cluttered with those annoying little ads

      Keep the ads to just top and sides. Many websites intersperse text ads in between the paragraphs of the main news content. Imagine if a newspapers did this with news articles. Even Gmail has a tiny news/advertisement line just above the menu and that news/advertisement line mixes news flashes and ads together.
  • That's bollocks

    no-one is desperate in this situation, except maybe the Yahoo employees. This is just standard corporate response - managements of corporations have a duty to the shareholders to pursue and protect every opportunity - they need to resort to these sort of tactics to show their boards that they are doing the jobs they were appointed to do - the more so when there's some sort of regulatory structure that might be exploited

    everything their corporate lawyers have to say should be treated as spam!