Google Actively Fighting Microsoft/Yahoo Merger

Conventional wisdom has it that Microsoft is obsessed with Google, and while there's certainly some truth to that, the reverse is equally true as well. That became obvious over the weekend when Google published an ill-conceived missive on the Web about Microsoft's plan to purchase Yahoo and began openly fighting the merger of the two companies' Internet operations.

"Microsoft's hostile bid for Yahoo raises troubling questions," Google senior vice president and chief legal officer David Drummond wrote in a blog entry published Sunday. "Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets."

While beating the drum for behaviors of Microsoft Past is as dramatic as it is pointless, Drummond conveniently left out the part where Google is now doing the same thing: Establishing a monopoly in online search and leveraging that dominance into new, adjacent markets like display advertising, email and calendaring, and office productivity. Indeed, Google's attempt at purchasing DoubleClick and thus securing its monopoly on online advertising have come under heavy antitrust scrutiny around the world for this very reason, though the US Department of Justice cleared the purchase late last year.

Google's offensive against Microsoft isn't limited to bizarre blog posts: The company has contacted both Yahoo (a direct competitor) and potential Yahoo suitors like AOL to see how it can help thwart the purchase. And Google's lobbyists are gearing up for an epic showdown in Washington by courting lawmakers and regulators to ensure that the Microsoft bid for Yahoo is at the very least slowed down.

Of course, this isn't the first time that Google has gone on the offensive against Microsoft, and given Google CEO Eric Schmidt's pedigree--he was at both Sun and Novell when those companies were handily defeated in the marketplace in the past decade by Microsoft--it's no wonder that this company is obsessed with the software giant. In the last year alone, Google and Microsoft and gone head to head twice, over Microsoft's inclusion of desktop search technology in Windows Vista and with regards to the DoubleClick deal. Google won decisively in desktop search, convincing Microsoft to alter Vista dramatically with nary a complaint. The DoubleClick deal is still being reviewed by European Union (EU) regulators and is thus unresolved.

The problem for Google is that its anti-Microsoft position is ultimately untenable. The combination of Microsoft and Yahoo would provide stronger search and ad competition to Google, but would still be a distant number two in the market. And Google can't itself purchase or partner with Yahoo without raising even more serious antitrust issue than will Microsoft. Because of its unquestionably dominant position in the market, Google's complaints should be heard, of course, but then dismissed. There's nothing less interesting that a winner whining that its competitors are getting stronger.

End of Article