updated 10:30 am EDT, Tue July 15, 2008
MS Attacks Google Yahoo
Microsoft today argued that US House and Senate Judiciary Committees that the proposed Google/Yahoo deal, claiming that Yahoo's agreement to support ads through a non-exclusive deal is anti-competitive and would allegedly hurt innovation. The legal counsel for Microsoft, Brad Smith, expresses fears that Google would control as much as 90 percent of online advertising, allowing it to dictate prices and force companies to advertise through it for proper exposure. He also warns that Google could potentially have a monopoly on Internet services.
"If search is the gateway to the Internet, and most believe that it is, this deal will put Google in a position to own that gateway and the information that flows through it," Smith claims.
He likewise assumes that Google would increase its rates and that the up to $800 million of income Yahoo hopes to generate from its deal would come only at the expense of companies hoping to advertise rather than competitors in online ads.
The specter of Google as an all-seeing Internet monitor is also raised as he warns that Google would allegedly have a view of nearly all online Internet activities and effectively put its own "national Internet policy" in place, according to Smith. He doesn't explain how a deal that is limited to ads and instant messaging integration would create this effect.
Google and Yahoo in the past said they have worked to create a deal they believe wouldn't run afoul of US antitrust laws. The current agreement would allow other advertisers, including Microsoft, to join in the program.
Microsoft's complaint is timed just weeks before a crucial August 1st shareholders meeting at Yahoo that will likely decide the fate of the search engine firm, with investor Carl Icahn receiving Microsoft support in his attempt to oust Yahoo's directors in a vote and make it easier for Microsoft to buy either Yahoo's search business or the entire company.