February 3, 2008 12:25 PM PST

Google calls Microsoft's 'hostile' bid for Yahoo troubling

by Elinor Mills
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A Microsoft-Yahoo merger could threaten the openness on which the Internet is based, a Google executive says.

Microsoft's $44.6 billion "hostile" bid "raises troubling questions," writes David Drummond, Google Chief Legal Officer, expresses cynicism in a blog posted on Sunday

"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 writes. "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?"

Microsoft and Yahoo together have a large share of the e-mail and instant messaging accounts, as well as two of the most popular Web portals. Drummond wonders about the possibility that Microsoft could use its dominance in the PC software market to unfairly limit access to competitors' Web services.

Yahoo said on Saturday that it is evaluating the unsolicited bid.

Elinor Mills covers Internet security and privacy. She joined CNET News in 2005 after working as a foreign correspondent for Reuters in Portugal and writing for The Industry Standard, the IDG News Service, and the Associated Press. E-mail Elinor.
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Add a Comment (Log in or register) Showing 1 of 2 pages (65 Comments)
yeah google is the underdog?
by vagarob February 3, 2008 1:07 PM PST
is this guy a joke? did this guy read anything about the google /
doubleclick thing at all? does he not notice the entire groups of
companies google is buying?

whine whine whine thats all google does today.
Reply to this comment
I agree somewhat... but not entirely
by MyRightEye February 3, 2008 1:11 PM PST
Google is huge, yes, but it also has never involved in the type of predatory behavior that M$ has. It's not just the size of the company, it's how they act. Not saying Google is perfect, but they
are no Microshaft.
View reply
You could ask Netscape Communications...
by Penguinisto February 3, 2008 4:51 PM PST
...oh, wait -they used to be the dominant web browser - until Microsoft dropped IE into default OEM installs of Windows and suddenly made Netscape not work so well on the same OS...

;)

/P
View reply
What gets dropped???
by dm66 February 3, 2008 1:25 PM PST
I find Yahoo's online offerings more usable than Microsoft's. So what happens next? Yahoo gets dropped or replaced with 'live' services?

With MS track record on taking over companies and developing/innovating (Groove anyone?) then all this will do is drive more people to Google's services, not sure what they are complaining about...
Reply to this comment
You nailed it, brother...
by lkrupp February 3, 2008 2:16 PM PST
Ballmer and company are gonna screw over Yahoo so bad not even
at&t will want to continue doing business with them. This should
be great news for Google. The Borg are gonna choke on Yahoo
trying to swallow them. The two corporate cultures are such polar
opposites the end result can only be chaos.
Wait...
by Penguinisto February 3, 2008 4:54 PM PST
[i]"I find Yahoo's online offerings more usable than Microsoft's. So what happens next?"[/i]

See also Hotmail, before and after Microsoft bought them.

I suspect things will be ugly, even before the deal is complete (assuming it actually gets in motion).

/P

/P
View reply
MS vs Google - let the brawl begin
by wango2007 February 4, 2008 9:13 AM PST
>>> dm66 With MS track record on taking over companies and developing/innovating ....

But you have to admit they have a 94% + market share due to their "developing/innovating." Better than anyone else it seems, even though they have had a few clunkers.

PC/MS-DOS seems weird now, but it acquired from a 3rd party, enhanced by MS and was a vast leap ahead over CP/M and everything else available at the time. MS got rich by producing more innovative successes than failures.

Personally, I'd like to see anyone eat Google's lunch, and MS has the chops to do it.
Google whines: Do as we say not as WE do
by kinowerken February 3, 2008 2:08 PM PST
Following its own move to create a monopoly position by buying
Doubleclick, buying every advertising (say, AOL, MySpace) account
that appears close to signing with Yahoo or MSN, etc. etc. we get
this load of hypocritical crap from the Googleborg.

Amusing. Can dish it out but can't take it?
Reply to this comment
Google should whine
by Sniche February 3, 2008 5:16 PM PST
Give M$ a leg in and they will take the lot. Having a monopoly with
windows, this is a good example of contempt shown to the rest of
the PC world, they then hike the price this is why Vista and Office is
so expensive
View reply
Google: MS deal is troubling..
by FutureGuy February 3, 2008 3:06 PM PST
...Google has the divine rights to own the internet, all your bases belong to only us.
Reply to this comment
When/If Google sells an OS...
by Penguinisto February 3, 2008 4:56 PM PST
...I'd worry about it then. Otherwise, a convicted monopolist muscling into yet another market? No way, dude - Google is right on this one.

/P
View all 2 replies
Damn right!
by VidalBurgos February 3, 2008 10:12 PM PST
Damn right!
Google secretly eager for bid to succeed
by wi3zard February 3, 2008 6:38 PM PST
I bet Google is engaging in misdirection, that it really wants the takeover to succeed. It will weaken even Microsoft to spend that much money on the takeover and it will prove very difficult to effectively integrate the Yahoo and Microsoft search and ad efforts. I expect there are secret high-fives in the inner offices of Google.
Reply to this comment
Microsoft drools for Yahoo.
by ServedUp February 3, 2008 8:34 PM PST
Google in the highest degree isn't worried about the merger
between these two companies. But it is worried about the
monopoly Microsoft already has in computer operating systems
and the browser market. And rightfully so, Microsoft is a
company that runs 90% of the world's computers. They also
dominate the browser space at 75% of the world market. Couple
this with the fact they plan on creating web development tools
for the internet as a whole, surely that can pose somewhat of a
serious threat. No? Surely this can be a cause for concern to
Google, if not Adobe. Right? With a company that dominates
most of the important categories in software for the PC. The
question we have to answer here is ? why wouldn't they use this
to their advantage? Certainly there are some serious
consequential issues here for the law books, as laws are still
being written for this kind of violation.

But on their own, Yahoo & Microsoft already provide a
competitive atmosphere to Google as separate companies. Why
change this? Microsoft just doesn't own as much as they'd like,
paralleled to that of a spoiled child. There really is no need for
them to merge if only for greedy purposes ? that could likely
prove damaging to the market. I for one have no trouble
sleeping at night that I don't see a Microsoft search bar or
service dominating my every internet move. Its best left to those
who've pioneered this technology and not to those who've just
bought it.
Reply to this comment
Confused
by Kimsh February 4, 2008 2:13 PM PST
So you want this left to Yahoo and a bunch of other companie sthat have already been absorbed, mostly by Google? Google, who of course are not leveraging thier dominance in the search and adds market to enter bids on spectrum and attack MS Office (the main earner for MS)?
Please, this is a spectacularly blinkerd view.
View reply
Regarding Microsoft's Bids to Buy Yahoo
by krosavcheg February 3, 2008 8:58 PM PST
Steve Ballmer (Microsoft CEO) is presently under the influence of Neptune "negative" Jupiter. This influence governs the unrealistic, impractical, and shows no workable plan for success, the influence is purely emotional. This influence also shows a disregard for morals, ethics and values, which reflects the "take over" tactics of Microsoft as Yahoo begins layoffs and restructuring within. The chart of Steve Ballmer indicates that he is making a "big" mistake in timing and planning that will harm Microsoft.
Reply to this comment
Regarding Microsoft's Bids to Buy Yahoo
by krosavcheg February 3, 2008 9:05 PM PST
Microsoft CEO Steve Ballmer is presently under the influence of Neptune "negative" Jupiter. This influence governs the unrealistic, impractical, and shows no workable plan for success, the influence is purely emotional. This influence also shows a disregard for morals, ethics and values, which reflects the "take over" tactics of Microsoft as Yahoo begins layoffs and restructuring within. The chart of Steve Ballmer indicates that he is making a "big" mistake in timing and planning that will harm Microsoft.
Reply to this comment
Control the internet? Oh puhleeeease.
by dtabraha February 4, 2008 10:41 AM PST
Seriously, Google is totally overestimating the importance of Yahoo, and underestimating the capabilities of the Internet to overcome limitations.

If Google was really concerned about making the Internet more "open", they should start complaining about AOL. Oh wait, AOL isn't trying to steal their market in Search, so they probably don't care.
Reply to this comment
Google statement
by mikalg February 4, 2008 11:02 AM PST
This statement by the TOP search/advertising vendor being negative about such a possible merger as being anti-competitive is.... well.... completely stupid on their part.

Does anyone even believe the garbage pouted out durring this tirade by Google? Don't get me wrong, I switched from MSN to Google years ago...and still maintain hotmail and Gmail accounts. I don't own stock in any of these companies at all. Therefor, I have no underlying reason to say this is a stupid statement, other than I believe it is.

Yahoo COULD make this argument if (what is hostile about this offer anyway!?)Microsoft was buying Google? I suppose that this offer is "hostile" to Google? Hmmm, are they really that worried? Maybe we should all watch these events more carefully if the RED ALERT at Google has sounded this loudly. What on earth is Google worried about anyway? Competition? Isn't that anti-competitive? :)
Reply to this comment
Uh....what?
by crimsondespot February 4, 2008 11:48 AM PST
Last I checked, Yahoo! doesn't own the internet. The idea that Microsoft would impose illegal restrictions and limit the free exchange of ideas is lunacy. If Yahoo and Google were completely eliminated, the internet wouldn't simply cease to be. That's the most ridiculous thing I've ever heard.
Reply to this comment
M$ needs Yahoo, way more than Yahoo needs M$.
by JCPayne February 4, 2008 11:51 AM PST
Remember when Microsoft wanted to buy AOL??
Anyone remember Steve Case standing up and telling a huge audience about when Microsoft said they wanted to buy AOL?

In his words:

http://www.businessweek.com/1998/29/b3587058.htm

"
On May 11, 1993, CEO Stephen M. Case of America Online Inc. (AOL) found himself face to face with Microsoft Corp. Chairman William H. Gates III. AOL, then the third-largest online-service provider, had gone public only a year earlier, after some fairly rocky beginnings. Gates--the most powerful man in Corporate America--was telling Case in a deadpan tone: ''I can buy 20% of you or I can buy all of you. Or I can go into this business myself and bury you.''
"

The fact of the matter is. Micro$haft NEEEDS this deal more than Yahoo needs Micro$haft.... I can name a bunch of flops by MS. From WebTV, to Microsoft Network, to MSN Search which they claim will be "on top" soon, to the tossing out of SCO vs. Novell court case...

Anyway
Yahoo has tons of potential suitors.

Ebay:
Then you'd see Yahoo, Ebay, Skype, Craigs'List, PayPal, Half.com, Overstock.com etc. etc. all under the same roof. Ebay would easily make up for the failed Yahoo Auctions unit. And also Yahoo could rebrand the Half.com/Overstock.com stores as Yahoo Stores or Yahoo Mall or something like that and reap big bucks from that. Also PayPal would be a big competitor to Google's upstart "CheckOut" business. Etc. ETc.

Sony:
Sony Entertainment could be another potential suitor. Yahoo could become the backend for the Sony PlayStation like how there's an XBox Live. And Yahoo chat could be embeded in the Sony Playstation for realtime game chat etc. Sony phones could be outfitted with Yahoo IMer etc.

Viacom:
Viacom has no large central network like how Disney/ABC does. Disney purchased the Go network and powers everything off there. Well Viacom has such stations as Nickelodeon, MTV, VH1, BET, etc. etc. and they could put their content on Yahoo.

A US phone company might like to snap up Yahoo. It would give them a kick@$$ platform for Online media that they could call their own content. Plus Yahoo's deals with outside companies could be another source of revenue....

AOL/TW Could make a bid. After AOL-TW failed to bring in the large audience they could make a go of it again with Yahoo and see if they can do things right this time....

Another Suitor possibly from Europe might swoop down last minute. Sort of like Terra from Spain when it snatched up Lycos (becoming Terra Lycos) etc.... You never know what might happen....

But I do know there's lots of directions Yahoo could go and make one or some companies very- happy.
Reply to this comment
troubling to their bottom line
by oxtail01 February 4, 2008 11:54 AM PST
Google should be worried. A strong second competitor (in this sense it doesn't matter if it's MS or someone else) means that the growth in advertising dollars will no longer be a given. Without the growth in advertising dollars, the high stock price can no longer be supported. If I were a Google stock holder, I'll be dumping it now. Google stock will pretty much follow the history established by MS. Tremendous growth followed by years of stagnation.
Reply to this comment
Market Share Anyone?
by mikalg February 4, 2008 12:50 PM PST
If Google REALLY had anything to worry about, it sure isn't Yahoo/MS bundled (1.0). This statement of a worried Google over MS taking their MONOPOLISTIC power and applying it to the internet is complete "hogwash". Want proof? Just how well has MS done SO FAR applying this so called "crushing power" to muscle out Google? Well, that answer is less than 15% market share against the behemoth of Google Advertising/search. Couple this with Yahoo shares of the same pie? STILL the underdog. There is a very good reason neither of these TWO companies are doing well competing against Google. Do you really suppose these ESSENTIAL reasons change if a combined MS/YAHOO situation is created? Does MS/Yahoo get a better position? Sure, but the pie is still the pie. It doesn't GROW bigger to accommodate MORE than there is already, now does it? Worry Google, I guess it does, but for the world, I don't see the HUGE impact they are decrying on this. All I see is the MARKET leader crying that the smaller guys (ironic isn't it?) may gang up on them! Seems to me ( I like Google, don't get me wrong )that the quoted statements gy Google, applies more to GOOGLE itself then they would like to admit!
Reply to this comment
Wait, wait....
by Spartan_458 February 4, 2008 4:22 PM PST
..did you just say that this purchase will WEAKEN Microsoft? I'm pretty sure, if nothing else, they'll get a bigger market share in search and about a $15 billion hike in revenue. How that hurts Microsoft is beyond me.
Reply to this comment
Is this statement...
by Commander_Spock February 4, 2008 6:55 PM PST
"Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?" True or False!. Read the History Of OS/2 and make your own judgment:

"BM decided early in the development process of the PC that they did not want to hire a bunch of programmers to write software for it - especially an operating system. IBM wanted the hardware business and did not care about the software. Since there was no clear-cut contender for an operating system at the time, IBM approached three organizations about writing one for the PC.

IBM first approached Digital Research and asked them to create a version of CP/M (Control Program/Microcomputer). The owner of DR snubbed the IBM lawyers and went flying or golfing (depending upon whose story you hear) instead..."

http://www.os2bbs.com/os2news/OS2History.html
Reply to this comment
Oh! How "Times" and "Things" Have Changed.
by Commander_Spock February 4, 2008 10:19 PM PST
"IBM decided early in the development process of the PC that they did not want to hire a bunch of programmers to write software for it - especially an operating system..." Read IBM Response to the OS/2 World Federation:

"Thank you for your letter and continued suggestions recommending an OS/2 open source project.


As stated in our response to your September 2005 letter we have considered the positioning of OS/2 and open source several times in the past, and for a variety of business, technical, and legal reasons we have decided to not pursue any OS/2 open source projects.


IBM has service offerings that continue to be available for customers who need ongoing support for OS/2, although IBM has no plans for product enhancements. IBM has recommended that customers on OS/2 consider migration to alternative solution offerings, and has a broad array of software assets and services to help customers migrate. We would like to ask you to encourage any customers who are still planning their migrations or who have other technical requirements to contact their IBM representative to discuss how these assets and services could be leveraged..." Kept telling ya all 90% Plus World "Desktop" Market Share is 90% Plus World "Desktop" Market Share; and, Code-Base OS/2 (Windows) will always be Code-Base OS/2 (Windows) Vote and celebrate the "New York Giants' (Big Blue's) Win" with your ATMs. ;-) :-$
View all 2 replies
Google is just mad because...
by BruceLawrence February 5, 2008 1:49 PM PST
Microsoft beat them to the punch.

They're afraid. This talk from them is just FUD.
Reply to this comment
Google Calls Microsoft From Anaheim
by jasonmck February 5, 2008 9:29 PM PST
A few readers have noted that Disneyland opens and closes an hour early on Tuesday, Febuary 5. The change to the park schedule is as a result of a private party for the employees of search engine Google, out of Mountain View, California. According to other readers who have friends and family who work for Google, the company has reserved large blocks of rooms at the Disneyland Resort hotels for employees. In addition to the private party on Tuesday, Google employees will likely be at the resort February 4, 5 and 6.
Reply to this comment
Lacking confidence
by nicmart February 6, 2008 8:55 AM PST
When a company runs to regulators you know it isn't confident
about its products. Google should focus on making the best
possible products, not on protectionism.

I happen to think that MSFT buying Yahoo could be a great thing
for Google considering Microsoft's inability to innovate. If Microsoft
was innovative would it need to spend the GDP of a small nation on
Yahoo?
Reply to this comment
Good move by Microsoft (The Empire)!
by Commander_Spock February 6, 2008 9:44 AM PST
"If Microsoft (The Empire) was innovative would it need to spend the GDP of a small nation (Colony) on Yahoo?" At time when the rulers of a particular "colony" (Yahoo) do not run the "colony" for the greater good of the citizenry (Freedom of Speech of User Groups...) then who on Earth must care if there is an Empire inspired hostile takeover (Coup De Tat) to spur innovation for the greater good of the citizenry (Freedom of Speech of User Groups...) of that "colony"!
View reply
Yahoo needs to sell out or quit the business!
by brucewayne64 February 7, 2008 12:41 AM PST
I have used, or rather, put up with Yahoo for about 3 years now and am tired of their high handed ways toward their customers.
From removing so-called Spam of mine from Yahoo Answers (my site as a reference, no selling), to prostitutes running the chatters off of the Chat site (religion too), to poor and uncaring service of their mail and other sites.
I even got reported for sending people at my Blogsite to a Charles M. Schultz site called "Fun with Peanuts", they said it was pornographic and made me remove it before they banned from using Yahoo services, but everyday, I still receive invitations to see sex pics in Yahoo's blogs.
Where are they when this occurs?
Maybe looking at the porn and laughing at the reat of us?
I say buy it, run the smug punk kids out and put adults in charge!
Reply to this comment
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