Google Responds To Microsoft’s Yahoo Bid

More defensive than we were expecting...

When Microsoft bid $44.6bn for Yahoo on Friday the first question on everyone’s lips was: what will Google make of this? Now we have our answer…

Using the Official Google Blog, David Drummond – the company’s Senior VP of Corporate Development and Chief Legal Officer – was surprisingly defensive. In typical Google fashion, Drummond started by praising the concept of the Internet (an approach which will feed the company’s detractors who label it something of a technological hippy) before questioning the legality of the move.

“Microsoft’s hostile bid for Yahoo! raises troubling questions,” Drummond explained. “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.”

Hang on, this isn’t what we were expecting! Where’s the bravado? He continued:

“Could the acquisition of Yahoo! allow Microsoft – despite its legacy of serious legal and regulatory offenses (sic) – 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?”

Drummond closed asking that “the merits of this proposed acquisition are examined and alternatives explored” and quite frankly, we’re rather surprised.

Riyad got it spot on in his editorial The Searchers, which addressed the takeover bid directly, when he questioned the considerable overlap between the two companies and whether “big MS feels that two struggling search strategies are somehow better than one”. Personally, I suspect Google is being overly cautious here and could even stand to benefit long term as its biggest competitor is forcefully jammed inside the Redmond collective.

Are we wrong here? Would a combined Microsoft/Yahoo search engine, for example, suddenly make you switch from Google? Let us know what you think in the forums

Drummond Post

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