Google pokes Microsoft in the eye and offers Yahoo a helping hand

Google pokes Microsoft in the eye and offers Yahoo a helping hand

Summary: Google's official statement on the hostile Microsoft/Yahoo! acquisition attempt is an angry one -- Google is upset that Microsoft is doing this, and they are positioning it as a "monopolist at work" type of deal.


Google's official statement on the hostile Microsoft/Yahoo! acquisition attempt is an angry one -- Google is upset that Microsoft is doing this, and they are positioning it as a "monopolist at work" type of deal.

The obvious result of a tie-up would mean a stronger competitor for Google on the search and ads front, but something I never thought about was the combination of MSN/Yahoo! Instant Messenger and Hotmail/Yahoo! Mail. The thought of these services together could be enough to delay the deal.

David Drummond, Chief Legal Officer at Google, calls for regulators to take a careful look at the acquisition -- but, in my opinion, there isn't much chance of them blocking the deal as it stands. Many people are thinking that this is simply Google's way to get back at Microsoft for slowing down their own DoubleClick acquisition, but could it be a carefully thought out tactic?

This long drawn out process gives Yahoo! plenty of time to thwart Microsoft's hostile bid -- and it could not be more poetic than a deal with Google. Eric Schmidt called up Jerry Yang (CEO of Yahoo!) to offer him a deal. There are no details on what was discussed, but some think that Google may entice other companies to submit competing bids by offering guaranteed revenue if Yahoo! agrees to use Google's ads on Yahoo! Search.

Whatever happens, this is quickly becoming a very interesting story that I'm sure will have many twists and turns in the weeks and months ahead.

Topics: Enterprise Software, Banking, Google, Microsoft, Social Enterprise

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  • "The obvious result of a tie-up...

    "...would mean a stronger competitor for Google on the search and ads front, but something I never thought about was the combination of MSN/Yahoo! Instant Messenger and Hotmail/Yahoo! Mail. The thought of these services together could be enough to delay the deal."

    Or MicroYahoo can do what yahoo did when Flickr was purchased...leave both competing services active for a while, untouched, then force users using one service to move to the other. And with Microsoft pushing MSN and Windows Live down everyone's throats harder than Apple pushes .Mac down it's customer's throats, you can assume that it's the Yahoo pieces that will be folded into MSN or killed off.
    • Likely...

      If Microsoft were to successfully acquire Yahoo, that's exactly what would happen to the services. They wouldn't want Yahoo's name to be out anymore, so they'd just phase it out slowly. Keep them all up at the same time to start, then start taking down services one by one, either merging the data or telling the customers that one will end and require switching to the other. All until every piece is under the MSN or Microsoft name.
    • More than IM and Email

      There's much more that could delay the deal besides the IM and Email. Search and ads aside, you also have the portal overlap, Sharepoint&Exchange/Zimbra, maps, MSN's Career Builder partnership/Yahoo HotJobs, and I'm sure I'm forgetting a whole slew of overlapping products and services. Just the competing login and identification services alone is a major point. Let's not also forget that Balmer pretty much came out and said redundant positions will be eliminated, which could potentially be a large chunk of Yahoo's current staff.

      With Google watching and throwing wrenches around, it's going to difficult for MS to wrap this deal up by the end of the year. MS needs to seal the deal quickly, as the Bush administration leaving the White House could impact the deal if it isn't completed by then. The next administration may take a harder stance on trust issues, putting stipulations on MS that could kill the deal.

      With that in mind, MS may drop the deal before the year is out. They could then sit back, watch Yahoo! implode from the stock and FUD damage that that may follow, and try to purchase parts or the whole again late next year at a bargain.
  • I want to see Yahoo stay independant

    If Google can help Yahoo stay independant and help them to ern a profit to thwart MS, I am all for it.
  • Yahoo should stay independent, including search

    If Yahoo outsources search to Google, then I will have to find another search engine that, because I don't like Google's privacy policies. And if Yahoo uses Google for email, then I will have go find another email provider because I don't like Gmail spying on the contents of my email messages (in order to bring up contextual ads).
    • About Google.

      I appreciate your feelings about Google privacy policy, but in terms of Google Search, Picasa, Google Earth, Web Image search & Gmail, I think it's worth the effort to go with them.

      First, the alternatives you cited have incentives to use your information anyway and without you're knowing about it. The internet is not secure by any means, so what's the difference? Google is just telling you exactly what they are doing and how. That scares people a lot.

      Google uses Linux which provides exceptional security and dependability. (ZDNet also uses Linux.)

      I have 11,800 emails in my Gmail, I'm using 8% of capacity (capacity increases as your emails increase). I often click on one of the 4 text ads, but find they are just keyed to marketable items like gold earrings, etc. The benefit is great, I'll be looking for some computer parts and an ad will appear for the item at a lower price and with free shipping. That's where I'll buy from.

      Again, I wouldn't automatically assume the other providers don't use your information.

      As far as Google Earth, Image search, and others, they are extremely valuable free services.
      • good points

        I will have to read Hotmail and Yahoo Mail privacy policies. I don't expect email to be that private, yet so much business these days is conducted with email. What are the legal ramifications if an email provider reads your email without explicitly notifying the customer (with privacy policy or other means). How would you feel if your phone company was able to voice-recognize your phone messages and use that knowledge to spam your phone with text ads. (Hmmm, will Google do this with Android?) I already receive a few ads from my cell phone provider tailored to what services I have purchased, but not my. Anyway, I am able to get what I need done with a mixture of various vendors' technologies and that works for me.
        • We have confidential communications

          And so do lawyers.

          They can't spy on those without causing a world of hurt if the information gets out. There are both legal and civil ramifications if that were to occur. That's why we don't use services like Hotmail and Gmail for confidential transmissions, and every transmission has a clearly worded statement of confidentiality, including instructions on what to do if you are not the intended recipient. That's pretty much the only way to ensure that there is an expectation of privacy for the communication....although if we were to drop it in a box on the corner with a .41 sticker in the top right-hand corner and someone opened it and read it, we could call the feds. Makes loads of sense, huh?

          Of course, if Bush gets his way, he'll be able to warrantless-ly read our mail and emails, tap our phones, install cameras in our homes and cars, dig through our garbage, conduct regular cavity searches, pet our dogs while we're out....invade our privacy in every possible fashion...without check.

          So, why are we worried about Google using our email to give us tailored search options again??
          • True privacy.

            I you require privacy, visit for their free encrypting software. It can't be cracked.
      • google is out to conquer the world

        I would rather see MS and Yahoo combine and would trust that a 1000 times more than google
        Paul Fletcher
        • What specific proof do you have that Google does anything wrong?

          Recent government demands for customer browsing information from Google, Microsoft and Yahoo resulted in only Google refusing to comply at the cost of court action. Microsoft and Yahoo caved in and handed over the information without a fight. Nothing is free. If you are going to use "Any" "Free" email service, there is going to be use of your information. Period. No one is going to give you this service and not use the information at all. Any emails you send may be "private" out to a certain point, then then enter the "street" and travel to another "Private" destination. Anyone in the "street" can access the info. That's why you don't use email for any confidential information. Yahoo and Microsoft can disclaim any wrongdoing by just saying email transmission just isn't secure. I think your really big problem would be someone getting into the Microsoft or Yahoo servers and retrieving personal information. That's why I use Linux. I've been using it at hve for almost 4 years with no viruses, spyware, malware or keylogger intrusions of any type.
          • Misplaced Fears.

            You're probably using Windows. Your security concerns should be focused on:

            1. Rootkits, can you identify if you have them? Do you know how to get remove them? AV does not see them because the Widows API does not pick them up. That is, they are on your hard drive, but Windows Explorer does not show them.

            2. Keyloggers, record keystrokes you use for online banking, retirement accounts, etc. then encrypt them and send them to a remote server. The info. is analyzed to determine login and password information. This information is then usually sold back to criminals in the US for just hundreds of dollars. My last work computer (XP Pro) was fully updated and was running Symantec Corporate anti-vius. I ran additional tools and found 2 key-loggers and 2 trojans that were on the computer for 23 days. I manually removed them.

            Review alerts identified in the Panda newsletter. I pasted my latest newsletter below. Linux does not have any of these problems nor does it require anti-virus. If you're going to use Windows, I would recommend getting the free online scanning (use the link in the newsletter). Viruses have gotten much worse recently. I'm getting a lot more calls from my clients and they are more serious.

            - Panda Security's weekly report on viruses and intruders -
            Virus Alerts, by Panda Security (

            Madrid, February 1, 2008 - Over 25 percent of computers with a security solution installed are infected, according to data gathered at the
            Infected or Not website ( this week.

            "The large amounts of new malware created every day have made traditional solutions insufficient to combat malware. They simply cannot cope with it. These solutions need to be complemented with online tools capable of accessing a larger knowledge base and detecting much more malicious code," explains Luis Corrons, Technical Director of PandaLabs.

            TotalScan Top 10

            1 W32/Bagle.HX.worm
            2 W32/Bagle.RC.worm
            3 Adware/Comet
            4 Adware/Starware
            5 Adware/Lop
            6 W32/Puce.E.worm
            7 Trj/Spammer.ADX
            8 Spyware/Virtumonde
            9 Trj/Rebooter.J
            10 Adware/NaviPromo

            As for the most active codes this week, the list is headed by two variants of the Bagle worm. The Comet adware, which shows ads to users through banners, pop-ups, etc, comes in third place.

            Regarding new strains of malware that have appeared this week, the PandaLabs report focuses on the Nabload.CXU Trojan and the Wow.SI, Lineage.HIT and Chike.B worms.

            The Nabload.CXU Trojan spreads in emails with the subject "A Pessoa com o Maior Rabo do Mundo" and contains a text in Portuguese and a link to a video. However, if the user clicks the link, they will actually be downloading a copy of the Trojan onto their computers. Then, the Trojan plays a YouTube video to conceal its actions.

            Also, this malicious code downloads two banker Trojans onto the computer to steal login data for accessing various banking entities' services.

            Lineage.HIT is a worm with Trojan features. It is designed to steal sensitive information from the system as well as user names and
            passwords for the following online games:

            * Lineage Lands of Aden
            * Maple Story
            * Legend of Mir
            * World of Warcraft

            Once run, WoW.SI copies itself to the root directory of all the system drives. Consequently, it can copy itself to removable devices (external hard disk, usb memory sticks ..) and run when connected to another computer.

            The worm drops a rootkit on the system to hide its actions and make detection more difficult. It also connects to an HTTP address from which it downloads a malicious file and a copy of itself.

            Chike.B is a worm that spreads by copying itself to removable drives and shared folders on the network. This malicious code changes the Windows explorer settings, disables the system restore feature and disables the Windows Registry.

            Finally, it configures the Windows Registry to make sure it is run every time a session is started .

            Users can subscribe to our Latest Threats service on RSS
        • My God Paul listen to what are you saying!

          Google has not gotten to where they are by unfair practices. They have gotten there
          by having good products and services. If Google is making money so are their
          customers. No one is forced to use Google.

          On the other hand Microsoft has been convicted and charged with unfair practices
          that abused their monopoly which perpetuated and protected that monopoly by
          removing competition. They never earned any of the customers that Yahoo! holds.
          All their customers are using MSN and by Microsoft's action must consider it to be a
          failure. You can't buy Mojo.
          • yes, we havei a choice not to use Google

            But if Yahoo outsources it search to Google, we will have even less of a choice, won't we?
  • One big reason that MS wants Yahoo, is that they can then make a special

    version of most Yahoo applications that are built on Silverlight, and thus you only get the advanced features and best experience if you have Windows. It will then seem like some things do not work if you use Mac or Linux. Heck, they will also work in dependencies to MS Office and OOXML.

    Really, to figure out what is going on, you need to follow the money, and MS brings in billions every month from Windows / Office. Everything else being insignificant in comparison. So, the main goal MUST to be to maintain dependencies on Windows / Office. And, even if it costs MS 50 billion to buy Yahoo, and 50 billion to integrate it, they would still be money ahead if the can keep the combo of Linux / Mac from reaching a tipping point.

    Pretty simple really.
    • I can understand the dependencies....

      but I think the real money is in online advertising and competing with Google. The Aquantive buy for 6 billion signals a paradigm shift where the main emphasis will be on trying to gain recurrent charges for advertising clients. Yahoo's value, to me, would be in it's large, established customer base. After all, they were the king of search before Google. Also, (due to the MS EULA.) they can be privy to customer data at the highest level (The OS level). This OS data gathering would far surpass any current Browser functions. They would need this data to provide targeted advertising for their clients. Buying Aquantive and Yahoo is really an advertising venure - Software can account for possibly 15% of the income compared to recurrent charges for advertising.
    • The flaw in your logic

      [i]Yahoo applications that are built on Silverlight, and thus you only get the advanced features and best experience if you have Windows[/i]

      Even though it runs on Windows, OSX and the a version being developed by Moonlight would show that it is not platform dependent, and all feature will be availabe for all platforms as who would spend 200 dollars to upgrade their software to take advantage of a free online application..

      This is more of a stab at Google's twin cash cows (Search and AdSense, as nothing else they produce generates any money for them) and the fact that Microsoft and Yahoo both individually have a much larger share of email and IM participents then google does, This is clearlly about generating ad revenue, and the more platforms, the more money.

      Microsoft still controlls the desktop market, and one of googles employees had made mention of the fact that there are far, far more Windows servers then Linux servers in the world, so this is no way tied to OS or Office apps as they are quite good where they at at with those. It all about taking away from Googles' twin cash cows, and the market may be noticing that as their stock has dropped over 250.00 a share over the last 8 weeks.

      Pretty simple really
  • Google should maybe also think about

    Starting there own OS to hurt MS if MS wanna go to war they may find there match
  • No interference

    It seems way too early to interfere in a deal like this. Commercial email systems like what Microsoft and Yahoo offer are fairly new, and easily duplicated. The combination of the two companies consolidates an audience and not much else.
  • shark or dolphin

    Ahh - it's amazing to see a shark suddenly become a dolphin.

    I'm sure Google has only altruistic motives in their buy-control offer (I mean helping hand) with Yahoo.

    I think when companies get to a certain size, their genetic algorithm stops being "I'm a friendly Dolphin" and becomes "Here come the Sharks like a bat out of hell. Someone gets in our way, someone don't feel so well." (Apologies to Leonard).