Google Lobs Legal Salvo in Merger Plan

Posted on : 04-02-2008 | By : admin | In : Technology


In a thinly veiled attack on Microsoft’s $44.6 billion takeover bid for Yahoo, Google said Sunday that the proposed deal raises troubling questions and urged policymakers to take a close look before approving any merger.

The criticism came in a blog post by David Drummond, Google’s senior vice president and chief legal officer, who said the combination potentially threatens competition, recalling Microsoft’s past run-ins with regulators over monopolistic behavior.

“Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” he asked.

The posting represents Google’s first comments about Microsoft’s surprise buyout bid last week, which promises to reshuffle the Internet landscape by bolstering Microsoft’s online advertising business. Google, in Mountain View, and Microsoft, in Redmond, Wash., are fierce competitors, and this is just the latest example of the bad blood between them.

Microsoft quickly responded to Google’s sharp elbows in a statement that defended a megamarriage with Yahoo, in Sunnyvale.

“The combination of Microsoft and Yahoo will create a more competitive marketplace by establishing a compelling No. 2 competitor for Internet search and online advertising,” said Brad Smith, Microsoft’s general counsel. “The alternative scenarios only lead to less competition on the Internet.”

He pointed out that Google has 65 percent share of the U.S. search market and an 85 percent share in Europe. In contrast, he said, Microsoft and Yahoo combined would control 30 percent of the U.S. search market and 10 percent in Europe.

In the blog, Drummond took aim at what he called Microsoft’s “legacy of serious legal and regulatory offenses” related to its Internet Explorer browser and Windows operating system. He questioned whether Microsoft would extend that behavior to the Internet, where it and Yahoo also operate the most popular Web portals.

“Could a combination of the two take advantage of a…

Tags: business, Google, Internet, microsoft, online advertising

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