Google made a new post on their official blog today responding to Microsoft’s $44.6 billion bid for Yahoo.
While Google has been patient in responding thus far (not wanting to show their colors early), they made quite a bold statement today by offering a position against the Microsoft offer saying “the openness of the Internet is what made Google — and Yahoo! — possible” and that “Microsoft’s hostile bid for Yahoo! raises troubling questions”.
Google’s primary concern with the deal is that it could possibly undermine the openness and innovation that made the internet (and Google and Yahoo!) possible. With Microsoft’s current dominance in the PC market, the notable concern is great that they will seek to create a dominant force in online search. Past projections for a combined Microsoft and Yahoo search would put them at a 30% market share in online search. That creates a major contender for Google who serves half the online searches in the US.
This could also signal a very big anti-trust issue (although that is yet to be determined) with Google seeking a monopoly on searches in the US. A merger between Yahoo and Google would already create the largest host of emails and IM chats around.
Google even goes so far as to ask that “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?”
It’s a very good question and one that should be addressed as the offer progresses. I doubt, though, that Microsoft would be allowed to limit access to services using their software or email dominance.
I’d like to hear your opinions. Is the deal a positive move for online search and media? Or is it a move that could potentially cause more harm than good? Or is it too early to decide?
Here’s a copy of the post:
Yahoo! and the future of the Internet
Posted by David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer
The openness of the Internet is what made Google — and Yahoo! — possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It’s what makes the Internet such an exciting place.
So 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.
This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first — and should come first — as the merits of this proposed acquisition are examined and alternatives explored.
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