updated 10:55 pm EST, Sun February 3, 2008
Yahoo Mulls Google Deal
Google considers the possibility of a Microsoft acquisition of Yahoo anti-competitive and possibly threatening to the Internet as a whole, says company Chief Legal Officer David Drummond in an official blog. The official argues that Microsoft's historic approach of establishing and extending proprietary standards is opposite to the very notion of the Internet; a Yahoo deal could potentially recreate Microsoft's leverage with Office and Windows on a much wider level, Drummond says.
"Between them, the two companies operate the two most heavily trafficked portals on the Internet," he explains. "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?"
Microsoft has issued a formal rebuttal to the argument, dismissing notions that an acquisition of Yahoo is an attempt to create a monopoly and contends instead that Google's 75 percent control of search revenue means that an acquisition of Yahoo would create more competition rather than less. "The alternative scenarios only lead to less competition on the Internet," Microsoft General Counsel Brad Smith claims, also arguing that Microsoft supports openness.
Regardless, sources within Yahoo are allegedly reporting that the search engine firm is investigating the possibility of allying with Google as an attempt to stave off a hostile Microsoft takeover. The plan would revive earlier talks between the two companies and may have been spurred along by a call by Google chief Eric Schmidt to Yahoo's own chief Jerry Yang, according to a Wall Street Journal report.
Other large financial, media, and technology firms have also expressed interest, though no bids have been made apparent, the insiders say. Yahoo is believed by some to be aggressively seeking alternative offers after considering the Microsoft offer as a threat rather than the invitation suggested by the latter's official reasons behind the proposal.