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Google Senior Vice President, Corporate Development and Chief Legal Officer, pictured here speaking at Stanford, has implied that Google will fight tooth-and-nail against a Microsoft-Yahoo merger.  (Source: Stanford)
Google won't let Microsoft and Yahoo merge without a fight

Late last week DailyTech covered Microsoft's landmark $44.6 billion unsolicited bid for Yahoo, which threatened to transform the online business landscape overnight.  While the outcome at first seem uncertain, opposition to the move quickly evaporated with the resignation of former CEO and Chairman at-the-time, Terry Semel. 

Semel had strongly criticized the merger as not in Yahoo's best interests.  With Semel's resignation, and landmark tough times for Yahoo, a deal seems so likely many analysts are already calling it a sure thing.

Meanwhile, Google remained quiet during Microsoft's initial announcements.  However, now the giant has come out swinging again the merger, which represents a serious threat to its online dominance.

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."

He implies that Google, and a pre-merger Yahoo represent openess and freedom of the Internet.  He implies that a Microsoft-Yahoo merger may mark a move towards staleness, proprietary systems, and most notably, monopolistic practices.

He adds the provocative question, "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."

He continues, "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."

The blog, particularly coming from Google's top legal brass, seems to unmistakably imply that should Yahoo accept Microsoft's bid, Google would lobby for legal action to block the merger.

Google would likely argue that a Microsoft-Yahoo union would craft a monopoly or would open the door to anticompetitive practices.  Its strongest evidence would be in the effects of the merger on total traffic and instant messaging use.  Yahoo's properties still ranked number one in terms of traffic last year.  A Microsoft-Yahoo team would certainly be the most visited set of properties.  Further, a union between Microsoft and Yahoo would mean that Yahoo's titular messaging software and Microsoft's MSN Messenger would create a strong new leader in terms of instant messaging market share, according to Google.

Google would have a tougher time criticizing the merger in terms of advertising revenue and search engine traffic.  Even with the merger, Google would currently still control approximately two-thirds of search engine traffic.  Google would also maintain an advertising revenue lead, by most estimates.

While a Microsoft-Yahoo merger would represent a significant boost to Microsoft's power, it could also bring serious legal woes for both companies.  With a hostile legal environment in the U.S. and abroad, and pressure from Google sure to be strongly applied, the real test may not be whether Yahoo accepts Microsoft's offer, but rather whether the accepted offer can survive international antitrust courts.


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Google
By Master Kenobi (blog) on 2/4/2008 12:10:45 PM , Rating: 5
It's unlikely Google can make much of a case to block the merger. Google is the majority leader in the internet market compared to Microsoft or Yahoo. I don't see how they can claim Monopoly here and make the case in a court of law.




RE: Google
By omnicronx on 2/4/08, Rating: -1
RE: Google
By mcturkey on 2/4/2008 12:59:04 PM , Rating: 2
That makes no sense. The court can order that the two IM services stay separate, but Microsoft will just fill YIM with ads for MSN and stop development of that service. Besides, wasn't there a strong push a few years back for the IM services to become interoperable with each other? Why would merging two of them now be such a problem? Isn't AIM still the biggest player? Admittedly I don't use IM anymore, so I don't keep track of it much now.


RE: Google
By StevoLincolnite on 2/4/2008 1:56:45 PM , Rating: 2
You can add "Yahoo Accounts" to you're Windows Live Messenger and talk to them via that way, even if the other person is on Yahoo Messenger and you use MSN Messenger.


RE: Google
By masher2 (blog) on 2/4/2008 3:53:31 PM , Rating: 2
> "The court can order that the two IM services stay separate, but Microsoft will just fill YIM with ads for MSN"

Assuming there was a court-ordered silo status for YIM, the above would never fly. Management would have to treat YIM as a separate entity, that would deal with MSFT on an equal basis with any other competitor.


RE: Google
By JasonMick (blog) on 2/4/2008 1:01:36 PM , Rating: 2
Seems like the court would move to block the merger before it would do that. Typically antitrust judgements have focused on opening not closing interoperability.

If anything, a lesser judgement might be a judge ordering that while MSN/Yahoo could share networks, they would also have to make their products transparent and interoperable with Google's messenger or AIM.

This would still suck somewhat for Microsoft as they would have to devote resources/money to maintain protocol docs, etc. However at least they'd have their merger.


RE: Google
By TomZ on 2/4/2008 12:21:10 PM , Rating: 1
I agree, it seems that Google doesn't have any legal grounds here (although I am not a lawyer...). But I actually think that Google wants to win in the "court of public opinion," which is their next best goal, if they can't actually block the merger.


RE: Google
By Polynikes on 2/4/2008 12:34:23 PM , Rating: 4
The truth is, they don't care about a potential "evil" monopoly, they just want to maintain their dominance and make money.


RE: Google
By Shining Arcanine on 2/4/2008 3:13:47 PM , Rating: 2
Google is just being anticompetitive. I do not think there should be, but there are laws against that. The downside to having such laws is that they foster anticompetition, as Google being a business, will do anything to get ahead of its competition, even if that means going to court.

This is a bit of a repeat of what happened to Microsoft in the antitrust case against them, as its competitors, looking to get ahead, arranged for an antitrust lawsuit. Because of that case, all new computers are loaded with garbage from the factory.


RE: Google
By VahnTitrio on 2/4/2008 12:43:46 PM , Rating: 4
Microsoft and Yahoo! had their names mentioned somewhere, Google just didn't want to feel left out.


RE: Google
By eman7613 on 2/4/08, Rating: -1
RE: Google
By Master Kenobi (blog) on 2/4/2008 1:14:21 PM , Rating: 3
quote:
With M$ already having been declared a monopoly by the law courts, its not a far shot for Google to block this.

First off, cut out the M$ stuff. Your not doing yourself any favors.

quote:
Even w/o that, there are lots of grounds legally (in the US at least) by which Google could win, and thats mainly b/c M$ is attempting to buy a direct competitor, while Google is not.

Incorrect. Microsoft has been declared a monopoly in the Desktop PC Operating System market. The fact is that Microsoft is buying Yahoo which ties in with MSN which holds less than 10% to bring their combined market share up to about 33%. Google controls roughly 70%+ making Google the only one who could be considered monopolistic in this market. Google's argument hinges heavily on the MSN Messenger and Yahoo Messenger market share, as well as the Hotmail and Yahoo Mail market share. Both are quite high. However for MSN and Yahoo messengers you have to consider AIM which I think is still the majority leader there. Google mail also competes against Hotmail and Yahoo mail, and has a large number of accounts there too. Meaning that if the merger goes through you get Hotmail/Yahoomail competing with Google Mail and MSN/YahooIM competing with Gtalk and AIM. Therefore no monopolies would be created by the merger.

The fact that MS is the dominant PC OS vendor will be largely irrelevent to this case.


RE: Google
By EntreHoras on 2/4/08, Rating: -1
RE: Google
By ImSpartacus on 2/4/2008 3:30:14 PM , Rating: 2
I still favor microsoft products and call them M$. Some people take that stupid little joke too seriously.


RE: Google
By EntreHoras on 2/4/2008 4:08:38 PM , Rating: 5
So, why don't use also Googl€, ¥ahoo or £inux?


RE: Google
By TomZ on 2/4/2008 4:27:05 PM , Rating: 1
LOL!


RE: Google
By eman7613 on 2/4/08, Rating: -1
RE: Google
By Donkeyshins on 2/4/2008 1:46:21 PM , Rating: 1
Oy.


RE: Google
By ajfink on 2/4/2008 1:09:31 PM , Rating: 2
It seems unlikely to be blocked. Google can't say much about monopolizing things on the Internet, regardless of how open and benign their policies and strategies seem.

I'm indifferent to this merger, as a lover of Internet freedom.


RE: Google
By theapparition on 2/4/2008 2:52:50 PM , Rating: 2
It might be harder than you think, young padawan.

Actually, Yahoo has a larger share of the online market than Google. I believe that Yahoo was the most visited place on the internet in 2007 and visitors spend an average of 4x more time on Yahoo than Google. Google did have a larger share of online searches, but Yahoo as a whole was still larger.

However, we can all see that Yahoo is on the delcine, while Google has yet to hit it's peak. Overall, it may be a hard fight to get this merger together.


RE: Google
By masher2 (blog) on 2/4/2008 3:42:34 PM , Rating: 3
> "Actually, Yahoo has a larger share of the online market than Google."

No. Google has a 58% share of the search market, and a 44% share of the online ad market. Yahoo and Microsoft combined only have a 33% and 32% share respectively.


RE: Google
By mcturkey on 2/4/2008 4:54:48 PM , Rating: 2
That may be, but users still visited Yahoo more and spent more time there on each visit. Just because Google is more efficient and profitable doesn't change the fact that Yahoo attracts more people. To be honest, I've not intentionally visited Yahoo in a very, very long time, but I used to go there for the online games (chess, etc) they had. So I can certainly believe that Yahoo gets more visits than Google, although they quite clearly aren't taking proper advantage of it.


RE: Google
By masher2 (blog) on 2/4/2008 6:11:29 PM , Rating: 2
You're confusing market share with total traffic. Google the company has a larger market share. Google the site has less hits than the Yahoo. However, in terms of business, revenue, or antitrust legislation, that in of itself is meaningless.


really?
By omnicronx on 2/4/2008 12:07:57 PM , Rating: 3
Is Google serious? Microsoft's dominance in the PC market has nothing to do with the market in which Google currently holds an estimated 70-80%, regardless of MS's past activities.

I am more worried about the Google monopoly if left untouched over the next 10 years, then I am of the declining Microsoft .




RE: really?
By JasonMick (blog) on 2/4/2008 12:19:04 PM , Rating: 3
I agree with your assessment that Google's claims are a little pot-calling-the-kettle-black-ish.

It all depends on the market. In the search/advertising market, Google has enough of a lead, that it could be accused of having a monopoly.

Google wisely focuses on the IM and total traffic metrics, which a Microsoft-Yahoo merger would have enough of a lead in to also be accused of being a monopoly.

Google may be unwise to surface these kind of claims because the apparent state post merger would simply be that you had two entities (Google, Microsoft/Yahoo), each behaving monopolistically in their own dominant sectors.

I'm not passing value judgement on whether this is good or bad, but from a legal standpoint, both could be in for some unpleasantries.

I do have to disagree with your final comment, though as I don't see Microsoft as "declining". Just because Apple is making small gains in OS market share, doesn't take away from the fact that Microsoft is stronger than ever with diversification into the MP3 player and Video game markets. Not trying to sing Microsoft's praises by any means, but the company is obviously active as opposed to declining, imo.


RE: really?
By omnicronx on 2/4/2008 12:49:22 PM , Rating: 2
quote:
Not trying to sing Microsoft's praises by any means, but the company is obviously active as opposed to declining, imo.
You are right, they are far from declining. But.. you have to admit they are no longer the dominating force they once were. Google is gaining ground, and as the computer market shifts more towards the internet apps, and phases out the need for an OS and its Applications, Google will become more dangerous. Microsoft attempting this buyout only acknowledges their fear of the way the market is heading.


RE: really?
By mcturkey on 2/4/2008 1:00:54 PM , Rating: 2
Agreed. While Microsoft still has more money to throw around than almost any other company on Earth, $44.6 billion is no small sum even for them. That they would be willing to pay THAT much money shows how truly afraid of Google they are.


RE: really?
By maverick85wd on 2/4/2008 1:03:58 PM , Rating: 2
quote:
and phases out the need for an OS and its Applications


I'm pretty confused here, are you saying a computer will be controlled entirely from an internet connection? I highly doubt it. I see where Google is coming from, Microsoft already has a lot of control over the OS/application market, for them to gain control over such a large sector of the internet is in my opinion dangerous and will no doubt result in more proprietary crap


RE: really?
By Master Kenobi (blog) on 2/4/2008 1:07:14 PM , Rating: 1
quote:
and as the computer market shifts more towards the internet apps

Sorry, but Internet apps will never overtake traditional apps. You really thinks corporations are willing to put their documents through internet based applications? Security concerns would crush that instantly.

quote:
and phases out the need for an OS and its Applications

OS will always be needed. How else do you expect to get to the internet and use these apps? Point aside. Full blown applications offer usability that far exceeds web based apps. I think your forgetting that web based functionality is constantly being constrained due to security concerns. The last thing people want is full blown applications running from the internet, the ability to take control of host systems and files is far too great. Security again will crush this.


RE: really?
By FITCamaro on 2/4/2008 3:19:49 PM , Rating: 2
Exactly. And I have no desire to have a terminal computer that gets everything from the net. Imagine if your internet connection went down. Not only could you not use your internet connection, your entire PC would be rendered useless.


RE: really?
By jtesoro on 2/6/2008 1:15:48 AM , Rating: 2
Never say never. Companies outsource stuff like HR all the time (in or out of country). Guess what information is stored in someone else's servers and accessed remotely: staff's salary information. Companies send trade secrets across secure connections to their manufacturers in far off places. Hospitals also send test results for analysis offshore.

A lot of very sensitive information goes over the internet already. Security is definitely a concern but is something that can be addressed in these cases, so I wouldn't rule internet apps out too quickly for that reason.


RE: really?
By cochy on 2/4/2008 1:07:22 PM , Rating: 2
Microsoft is still the most profitable tech company. Although as I mentioned in the previous article and as you mention here, this Yahoo! buyout is a defensive move. MS can't allow Google to run away with the Internet market the way MS ran away with the OS market.

Google as a company has exceedingly good corporate vision. They are already making in-roads into Microsoft core businesses. With total Internet dominance Google will have the capital resources to rival MS on all fronts.


RE: really?
By eyeofwarrior on 2/6/2008 8:18:50 PM , Rating: 2
Why does google think they have to be the dominator? It's
like a restaurant chain that tries to diversify too much;
eventually they are spread so thin, something has got to
breakdown. They just want to have all the toys!(my toys,my
way! take it or leave it!)


Google As Hypocrite
By TomZ on 2/4/2008 12:10:11 PM , Rating: 1
So let me get this straight. Google can acquire all kinds of Internet-related companies as they have through the years, but now that Microsoft wants to buy Yahoo, Google wants to oppose that because of some philosophical argument? That comes across as very hypocritical to me.

Of course this acquisition will put a lot of pressure on Google - that is its purpose. And the good "philosophical" benefits of this is that it helps avoid Google's own near-monopoly/strangehold it currently has in online search and adversiting. Two big players are a heck of a lot better than one massive player, from the standpoint of competition and consumers.




RE: Google As Hypocrite
By Master Kenobi (blog) on 2/4/2008 12:15:49 PM , Rating: 2
Yea this acquisition will put a lot of pressure on Google. Rather than 2 smaller companies to battle with, they will face one decently sized company. A combined Microsoft and Yahoo also is unlikely to be pushed around by Google.


RE: Google As Hypocrite
By marvdmartian on 2/4/2008 3:15:23 PM , Rating: 3
Yeah, I'd have to say this smacks a little bit of Google saying under their breath, "Darn it! We wanted to drive the value of Yahoo down some more, before WE put in OUR unsolicited bid!!"

One question, to whomever can answer......what, if any, effect would this have on AT&T/Yahoo??


RE: Google As Hypocrite
By masher2 (blog) on 2/4/2008 3:46:00 PM , Rating: 2
AT&T Yahoo is just a cobranding scheme, run pretty much entirely by AT&T...and Yahoo has a similar deal with Verizon.

There's no real overlap between AT&T and MSFT; I don't see this deal being affected by the buyout.


RE: Google As Hypocrite
By Master Kenobi (blog) on 2/4/2008 3:55:30 PM , Rating: 2
Probably none. AT&T is a telecom provider, neither Google or Microsoft is a telecom provider and thus would likely go with existing contracts, or possibly even expand them.


RE: Google As Hypocrite
By imperator3733 on 2/4/2008 6:10:04 PM , Rating: 2
quote:
A combined Microsoft and Yahoo also is unlikely to be pushed around by Google


Hopefully that will be true. I'm still mad that Microsoft changed all that stuff in Vista SP1 because Google wanted them to do so. How are you supposed to get to the search window now? That's the only way to just search for tags without searching for something else first, then enabling the search pane, and then changing what you searched for.


RE: Google As Hypocrite
By TerranMagistrate on 2/4/2008 12:46:27 PM , Rating: 3
Two big players are a heck of a lot better than one massive player, from the standpoint of competition and consumers.

Unlike the OS and productivity suite software markets, correct? Microsoft's intentions are clear with this merger: to eventually be in the same position as they are with their core business in regards to the competition.

With the way MS just loves to make just about everything proprietary, hopefully they will failure miserably in this venture.


RE: Google As Hypocrite
By TomZ on 2/4/2008 1:03:42 PM , Rating: 2
quote:
Unlike the OS and productivity suite software markets, correct?

Exactly. Maybe now in 2008 we could do better (though I'm not sure), but when Windows and Office came into their own, standards did not exist that could have allowed a number of different companies to build interoperable and interchangeable products at that level. Therefore the "de-facto" standards that arose around Windows and Office have been a huge benefit to businesses and end users. Monopolies sometimes do have some benefits...


RE: Google As Hypocrite
By Master Kenobi (blog) on 2/4/2008 1:17:23 PM , Rating: 2
quote:
Therefore the "de-facto" standards that arose around Windows and Office have been a huge benefit to businesses and end users. Monopolies sometimes do have some benefits...

Further proof of this can be seen with CISCO and Intel during the same time period.


RE: Google As Hypocrite
By mindless1 on 2/6/2008 11:08:01 AM , Rating: 2
No, that is not a benefit of a monopoly. Open office document formats now exist even despite the monopoly, and in fact we can assume 'nix was easily going to be a standard OS in force right now if Windows had never existed. MS could have chosen to be interoperable with 'nix. That would have unified the two alternatives quite well.

It's just wrong to think MS brought anything that wasn't inevitable and really that what they did was stiffle innovation. Think about it, besides newer faster hardware support what do we REALLY have today that is all that revolutionary? A filesystem? Continual changes in GUI? Massive security overhead so we can keep using proprietary features?

You don't have to have a monopoly to have standards. We can see they exist with and without, while there are practially always the downsides to the monopoly. Would you like a video card monopoly? An automaker monopoly? We could similarly argue that with only one, everybody only has to support one so it's the standard, but is this better? No, interoperability, compatibility, is better and that has always been opposite of MS' goals. MS as a company is not good or evil, but their choices are not of benefit to consumers.


By crystal clear on 2/5/2008 5:09:26 AM , Rating: 2
quote:
While a Microsoft-Yahoo merger would represent a significant boost to Microsoft's power, it could also bring serious legal woes for both companies. With a hostile legal environment in the U.S. and abroad, and pressure from Google sure to be strongly applied, the real test may not be whether Yahoo accepts Microsoft's offer, but rather whether the accepted offer can survive international antitrust courts.


Now lets be realistic, the legal teams at M.S. have done their research before M.S. could make the offer to Yahoo.

They are fully aware about antitrust actions/laws/etc-they are quite experienced in that.

The investment bankers advising both the parties also have their legal teams checking these aspects of the buyout.

If you were at M.S. would you not take legal advice ?




By crystal clear on 2/5/2008 7:43:08 AM , Rating: 2
A task force for the Judiciary Committe moves quickly in setting the Feb. 8 hearing, even though no deal has been struck.

It didn't take long for Congress to get involved in Microsoft's proposed $44.6 billion offer for Yahoo.

The day after Microsoft's Feb. 1 offer, the U.S. House Judiciary Committee's Task Force on Antitrust and Competition announced a Feb. 8 hearing on the proposed takeover. Ostensibly entitled "State of Competition on the Internet," the hearing is clearly focused on the antitrust implications—if any—of the deal.

"Microsoft's bid to acquire Yahoo is certainly one of the largest technology mergers we've seen and presents important issues regarding the competitive landscape of the Internet," Judiciary Chairman John Conyers and ranking member Lamar Smith said in a joint statement.



http://www.eweek.com/c/a/Messaging-and-Collaborati...


By jtesoro on 2/6/2008 4:39:47 AM , Rating: 2
Not sure what you mean here. I'm pretty sure we know MS is taking legal advice. Because of that, are you implying that this will sail through?


Typo
By kinnoch on 2/4/2008 12:01:18 PM , Rating: 2
Microsoft-Yahoo merger, not Microsoft-Google merger




RE: Typo
By eyeofwarrior on 2/6/2008 8:40:49 PM , Rating: 2
Yo kinnoch, voodoo chicken must of had brain-flatulation &
wasn't literally cognizant at the time. lwol


Google
By nevermore781 on 2/4/2008 12:29:12 PM , Rating: 2
What a bunch of whiners. Google has Yahoo! pretty much beat when it comes to search and advertising. I remember back when Yahoo! search was powered by google results. The only monopoly going on here is google and their constant purchases ie grandcentral, youtube, doubleclick and the list goes on. Maybe google wouldnt worry about their messaging client if it was a decent client or had the ability to message other clients from googletalk/gmail (msn and yahoo already can intercommunicate between clients). Dont get me wrong, i love google, i love their openness and innovation platform. I admire the exec team of google commiting to 20 years of developing google before they part ways, but quit freaking whining.




RE: Google
By jtesoro on 2/6/2008 4:42:21 AM , Rating: 2
If I recall correctly, Google also offered to sell their tech to Yahoo, but it didn't pull through. I wonder what the world would have been like then...


google = hypocrites
By gshock888 on 2/4/2008 1:34:22 PM , Rating: 2
and i thought google wasn't evil. if they're not being evil here, they're being hypocrites: they pushed their double click deal and claimed it as the next best thing since the internet. while an offer from microsoft for yahoo and they whine and whine.

i love google, but this will put a dent in their image




RE: google = hypocrites
By eyeofwarrior on 2/6/2008 8:30:43 PM , Rating: 2
why would anyone want to use google as search engine anyway?
they are so anti-second amendment, a lot of donations go to
anti second amendment groups. George soros is deep into
google too...million moms march, move on.org etc.,....


If all three merged...
By VoodooChicken on 2/4/2008 12:58:29 PM , Rating: 3
just the thought of Yahooglesoft hurts my groin. Maybe I should see a doctor.




lol
By kotix on 2/4/2008 3:02:30 PM , Rating: 2
if the merger goes through you can bet money that the EU committee will have another big payday rofl




Proprietary monopolies?
By Some1ne on 2/4/2008 3:44:45 PM , Rating: 2
quote:
He adds the provocative question, "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."


I'd love to see this guy's opinion on Apple then. They've taken the proprietary hardware/software thing an order of magnitude further than anything Microsoft has ever done. At least if I buy a copy of Windows, Microsoft doesn't try to lock me in to running it on a computer that I also have to purchase from MS.

It seems Google is making a lot of fuss over a minor issue. The deal hasn't even been agreed to by Yahoo, let alone approved in the broader sense, and there's no telling at this point exactly what Microsoft would do if the deal does go through. Right now it comes off more like Google is afraid of having to deal with some real competition and possibly face a stronger threat to its online dominance than Yahoo ever presented on its own.

If MS does try to take advantage of its acquisition to somehow try to transform the Internet in a proprietary way, then it makes sense to complain about it. But until there's actual credible evidence that it's happening, or at least that it's about to start happening, then Google should just chill out a little bit, and watch how thing unfold.




Youtube
By Samus on 2/4/2008 5:23:25 PM , Rating: 2
So I guess Google buying Youtube, a direct competitor to Google Video, wasn't a 'hostile' takeover for control of online video delivery services?

Google, if you weren't a monopoly like you acted as in that buyout, you would have done what you do best, competed with Youtube and made Google Video BETTER.




By Darkskypoet on 2/4/2008 7:00:52 PM , Rating: 2
Couple points:

1) The question at the heart of the matter that seems to be raised, is not Microsfot net properties plus yahoo net properties equals monopoly; thats silly. Thats hard to say with a straight face vis a vis google.

The question they ask, is about the role of msft's existing monopoly on the PC software side in conjunction with a near doubling of their net market share. Can this be detrimental to the consumer? The internet? Innovation? (almost got sick forming that last word... just thinking of Ballmer's and Gate's use of the same in defense of some of their actions)

Google may have a near monopoly in search, and ad derived revenue, but they are not purchasing Apple, or IBM, or Sun, etc. Google purchasing other net properties, is not the same sort of legal question as what is being posed here.

The question here revolves round the formation of essentially a duopoly by a firm that already holds a monopoly in a very closely related market. Something Google does not have. One can say Google holds a monopolistic position in search, and ad revenue derived from search, however, the merger of Microsoft and Yahoo! changes this to a duopolistic environment with Microsoft still holding a monopoly in the closely related market of PC software. A very different beast then Google (currently).

2) If Google doesn't come out against this, do you know how many lawsuits can be filed on behalf of share holders? If google stays mum, or says, "Hey, sounds like a great Idea!!" and it negatively affects Google's share value, and consequently Shareholders investment, the risk of litigation is immense. Especially in the United States, especially if it does succeed, and does massive harm to Google. Google in a sense must protect its shareholders, and must come out against this move with whatever sort of argument it can.

The joys of being a private firm are not necessarily available to a publicly traded one. In this case, regardless of anyones agreement with the argument made, Google must make one; if for no other reason then to protect management from overly litigious shareholders and other forms of fallout caused by the lack of a Google response.




New surprise developments
By crystal clear on 2/5/2008 7:22:31 AM , Rating: 2
SEATTLE (Reuters) - Microsoft Corp said on Monday it may borrow money for the first time in its history to fund a portion of its $44.6 billion unsolicited offer for Yahoo Inc.

Microsoft also said it expects Yahoo's board to agree to the deal quickly, but Yahoo said over the weekend that it expects to take "quite a bit of time" to weigh all of its strategic options including remaining independent.

A source familiar with Yahoo's strategy said it is considering a business alliance with Google Inc to fend off Microsoft's offer.

Microsoft Chief Financial Officer Chris Liddell said the software company may issue some debt to finance the cash portion of its 50-50 stock and cash offer for Yahoo, instead of drawing down its entire $21 billion cash pile.

"It's likely we're actually going to borrow for the first time," said Liddell in an annual strategy meeting with analysts. "It's going to be a mixture of the cash we have on hand plus debt."

Liddell declined to say whether Microsoft was already buying Yahoo stock on the open market. He also did not give any information on what form of debt Microsoft will seek in the capital markets.



http://www.reuters.com/article/businessNews/idUSWN...




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