Microsoft-Yahoo A-Bombed by Google

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Google blasted the Microsoft bid for Yahoo on the official Google Blog this afternoon. SVP Corporate Development and Chief Legal Officer David Drummond, characterized Microsoft's proposed acquisition as a "hostile bid" that threatened the underlying principles of the Internet: "openness and innovation."

Google then went nuclear, dropping the "A-bomb" -- invoking anti-trust concerns and citing as evidence Microsoft's "unfair practices" and "legacy of serious legal and regulatorty offenses" in the Netscape browser wars.

Google also stated, "Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts."

Google went on to note, "And between them, the two companies operate the two most heavily trafficked portals on the Internet."

Google's conclusion? A question all regulators and policymakers need to ask themselves:

"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?"

Last we heard, Google was pleased with the "App" strategy that would accelerate the transition of search from the desktop to mobile devices.

Former Netscape exec and Google CEO Eric Schmidt said on the Jan 31 Q407 earnings call, "The App strategy, which we announced earlier in the year, now fully visible -- more innovation, data portability, all the apps now either in place or coming and mobile, which we are very excited with Android, the My Location service as part of Maps and many other new features that are both out and coming. So we are optimistic about 2008. We have growing revenue streams across a broad range of verticals and markets."

So was the Google celebration of "cloud computing" an illusion?

Or is Google just dropping a smartbomb on the Microsoft-Yahoo combo?

Welcome, to the new "slash and burn" take no prisoners politics of Google lobbying.

Full text of Google's response after the jump.

Yahoo! and the future of the Internet

2/03/2008 11:45:00 AM
Posted by David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer

The openness of the Internet is what made Google -- and Yahoo! -- possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It's what makes the Internet such an exciting place.

So 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.

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.

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.

This hostile bid was announced on Friday, so there is plenty of time for these questions to be thoroughly addressed. We take Internet openness, choice and innovation seriously. They are the core of our culture. We believe that the interests of Internet users come first -- and should come first -- as the merits of this proposed acquisition are examined and alternatives explored.