Microsoft’s Yahoo Bid Update: Google’s Two Cents
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Written By Sepideh Saremi | February 4, 2008 | Share This
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The big G didn’t waste a lot of time after Microsoft announced on Friday that it wanted to acquire Yahoo for $44.6 billion. In a blog post published Sunday, Google’s head lawyer, David Drummond, argued that Microsoft’s bid threatens the future of the Internet, wondering if it will make the Internet less open:
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?
Of course, what Drummond doesn’t mention is search share, which is likely a big part of Microsoft’s bid, because Yahoo is runner-up, even if by a long shot, to leader Google. That’s what Microsoft lawyer, Brad Smith, countered with in Microsoft’s statement yesterday:
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.
Meanwhile, the Wall Street Journal reported today that Google CEO Eric Schmidt called Yahoo CEO Jerry Yang to lend a hand against the Microsoft bid, which some say means Google wants to take over Yahoo’s search arm. But there are arguments against Yahoo outsourcing search, like this one by Saul Hansell at Bits:
But for Yahoo not to be in search or in search advertising, I think, would consign it to a much smaller role in the future. Search is so much a part of how people navigate the Web that it is hard to imagine being a successful Web portal without search at the center. Moreover, there is no longer a strict difference between search ads — sold in a huge auction — and brand ads — sold by a sales force over lunch.
Clearly, search is a huge part of the Yahoo-Microsoft issue, and it will take some time and likely countless blog posts for everything to get hammered out.
Topics: Google, Investment, M&A, Legal Issues, Microsoft, Yahoo! |