Over the weekend Google became more involved in undermining a hostile buyout of Yahoo, Google’s largest search competitor, by Microsoft, Google’s largest tech competitor, by responding to Microsoft’s $45 Billion offer to buy Yahoo.
Google’s Chief Counsel David Drummond responded on the Google Blog that Yahoo is not just another company, but a cornerstone of the Internet and Microsoft’s policiy of monopolistic practices may then extend beyond the PC onto the world wide web.
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.
Sources close to Yahoo & Google have also expanded the scenario of Yahoo’s future to include what could be an alliance between Google and Yahoo. According to Eric Auchard of Reuters, Yahoo is considering revisiting talks with Google that the two companies had months ago, as an alternative to selling out to Microsoft for the low stock value of $31 per share.
Something similar to the Google AOL deal?
Yahoo had been partners with Google in the past, using Google search to power the search section of Yahoo before the company purchased Inktomi, Altavista and the search arm of Fast’s AlltheWeb to create what is now Yahoo Search Technology. The move by Yahoo, a long term mistake by the company, took Google out of semi-obscurity and catapulted the company to what it is today.
Just because Yahoo and Google were partners in the past however does not mean that they will become allies in the future. If we use that same train of reason, we could also put a spotlight on the Yahoo Search Marketing partnership with Microsoft which powered Microsoft Sponsored Search Ads before the Redmond company created adCenter.
The Google rumors and even more news coming out that Yahoo is talking with various communications and telecom companies, which would stall the Microsoft takeover and perhaps give Yahoo more level ground to demand a higher cost per share, something closer to what the company believes its true value to be.
Regardless, Microsoft’s move last Friday has led to some very exciting news in the search and stock markets, and this should lead to a very interesting week as Google and Microsoft duke it out in their very public battle over Yahoo.
Who will the winner be in this battle? Probably Yahoo as the open air discussions lead to more and more value & strength the company brings to the table, or whomever acquires them.