Google vs. Microsoft: Google responds to possible Yahoo! acquisition

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It was only a matter of time before someone on the Google Blogger account commented on Microsoft’s bid for Yahoo!, as any Tom, Dick and Harry can see it’s a virtual slap in the face for the big G.

In a post titled ‘Yahoo! and the future of the Internet’, Google’s Senior Vice President David Drummond claims Microsoft’s $44.6billion bid for Yahoo! are ‘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.’

Microsoft intends on purchasing Yahoo! to further their online presence (currently lagging behind severely compared to Google’s 75% globally), and by combining the world’s second and third largest search engines, they might be able to get in on the lucrative $40billion on offer in search-powered advertising revenue.

‘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,’ Drummond wrote, then posed several questions to the reader…

‘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.’

Drummond goes on to say that Google takes ‘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.’

Will Gates or Ballmer retaliate? Heck, will Scoble retaliate? This could very quickly turn into a new quasi-format wars obsession now that the HD DVD/Blu-ray battle looks almost over *sobs hysterically*

Whilst Google obviously has a fair amount to worry about here, I doubt Microsoft’s potential acquisition of Yahoo! will make as huge an impact on Google as first thought – in 2007, Google earned more than $11.6billion in advertising revenue, compared to Yahoo’s $5.1billion and Microsoft’s $2.8billion. As Bill Gates himself once said, the future of the world’s technology leaders will be determined by their online presence, and currently, Microsoft has a lot of catching up to do.

(via The Official Google Blog)

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Katherine Hannaford