This morning the expected statement from Google appeared regarding the possible Microsoft/Yahoo merger.

Google’s top lawyer, David Drummond has some pretty disparaging (and a little bemusing) words about the proposed deal. He writes that Microsoft’s “hostile bid, is an attack on “the underlying principles of the Internet: openness and innovation.”

He also suggests that a result could possibly see Microhoo “exert[ing] the same sort of inappropriate and illegal influence over the Internet that it did with the PC” and “extend[ing] unfair practices from browsers and operating systems to the Internet.” He also flags Google objections to the deal saying;

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.

Seems to me his concerns over Microhoo are readily reversed to being concerns over Google’s (almost) monopoly over search and a broadening number of online areas.

What Google’s words do show is a maturing into a big corporate player (which should give their institutional investors some comfort). As for their merger concerns, it’ll be interesting to see what he regulators make of them

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

7 Comments
  • Falafulu Fisi |

    hostile bid, is an attack on “the underlying principles of the Internet: openness and innovation

    This twat lawyer must be a standup comedian. Attack on innovation? Microsoft has had more research papers published in various journals compared to the total combinations of its competitors. In fact Yahoo & Google don’t submit papers to leading major computing journals for publications. When a company publishes its new research and make them publicly available, it means that they’re innovating. Publishers don’t accept papers that are non-original , ie, they reject papers which are submitted on things that have been done in the past.

    This lawyer, can’t tell the difference between innovation (original work) and being a follower (one who adopts ideas from research of others). Yes, I have seen this from Google itself, of using algorithms that have been published by others in their product development.

  • I prefer Yahsoft …

    @Falifilu fishi: since when does innovation need to be public? I can assure you that there is plenty of innovation going on at Google, but not all of it is published or made public. Some is, though, and no doubt some of it is built on or with innovation from elsewhere.

    Microsoft may publish this that and the other widely but this does not change the fact that they could not innovate their way out of a paper bag which is why their business model involves expansion by acquisition, stifling innovation if it doesn’t suit their purposes, and generally behaving in an anti-competitive manner. What are you a Microsoft fan-boy? Come on. Why is Microsoft making a play for Yahoo! an online media giant? Answer: because Microsoft just can’t do it themselves, or they would already have done so.

  • by the way, if you look here:

    http://tinyurl.com/2asbg8

    you will see Microsoft’s response, which is as follows …

    “The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The alternative scenarios only lead to less competition on the Internet.

    Today, Google is the dominant search engine and advertising company on the Web. Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65 percent search query share in the U.S. and more than 85 percent in Europe. Microsoft and Yahoo! on the other hand have roughly 30 percent combined in the U.S. and approximately 10 percent combined in Europe.

    Microsoft is committed to openness, innovation, and the protection of privacy on the Internet. We believe that the combination of Microsoft and Yahoo! will advance these goals.”

    Can anybody point to any serious innovation, support of openness or the protection of privacy on the Internet on Microsoft’s behalf?? I can’t.

  • Falafulu Fisi |

    Robin said…
    I can assure you that there is plenty of innovation going on at Google, but not all of it is published or made public.

    There is no doubt that there is innovation at Google, one is naive to think otherwise. I am just making a point about lawyers who are making uninformed comment about something they have no clue about. The lawyer is making a noise about something that is none of his concern at all. I suspect that his only reason for making noise about this issue is that Google is going to pay him millions to make more noises by lobbying the State Commissars (US State Department) to use the anti-property rights anti-trust law to prevent this sale from ever taking place. The anti-trust law is unconstitutional where it violates property rights which is constitutional. If Yahoo’s investors (a property that belongs solely to them and not the state or consumers) agree for the merger with Microsoft, then it is their constitutional right to accept or decline this offer without the State Commissars interference. The State’s has no right whatsoever in dictating to the agreement between 2 or more consenting parties about a sales transaction in capitalist free market.

    Robin said…
    …generally behaving in an anti-competitive manner…

    Robin, I suggest you need to read more about dominance by virtue (Microsoft or Google , etc) and dominance by coercion (tactic used by Mafia or State’s when anti-trust law is being used). There is no such thing as anti-competitive in the free-market economy. There is only a better competitor and worse. Now, you should read the following article and then come back and try to refute it:

    Drop the Antitrust Case Against Microsoft

    Robin said…
    What are you a Microsoft fan-boy

    Yes. I am a fan & defender of property rights. Whether it is Microsoft, Google, Yahoo, or even you. I have defended Google’s in the blogosphere for attack made by media, bloggers, commentators who made out in recent months that Google’s knol project is an evil attempt by the search engine giant to dominate the internet. My argument in defending Google was this. Google doesn’t come with a gun and force internet users to use its search engine. If users don’t like Google because of this perceived evilness, they can simply stop using it and switch to Yahoo or Microsoft, since those 2 competitors , want to topple Google’s number one spot. The Google’s search engine and its business is privately owned by its investors. Whatever Google (or Microsoft, IBM, etc) has decided to do with how to run its business (be it acquisition of new businesses or developing new products), that decision is entirely theirs. It is not yours, mine, State Department or anyone else to tell them what they can or can’t do, because that is anti-property rights.

  • Lighten up Falafulu Fisi.

    I too am a fan and defender of property rights. But I’m also a fan of competition, and I don’t see any correlation between how Microsoft behaves and either innovation and/or competition. I certainly don’t see Microsoft as not employing coercion at all – maybe we have different dictionaries?

    Falafulu Fisi, I suggest you check out Rod’s blog post on this topic:
    http://www.drury.net.nz/2008/02/05/on-the-proposed-microsoft-yahoo-deal/

    You would also do well to check out Rod’s post on use of apostrophes.

  • Falafulu Fisi |

    Robin, obviously you’re not a fan or a defender of property rights. Did you read the article I quoted in my previous post regarding the anti-trust case against Microsoft? The term competition is frequently used by those who don’t understand property rights. The rights to my own properties are solely mine and not anyone else. What is yours is owned by you and what is mine they belong to me and not the consumers. You made a mistake in equating the rights of consumers & competitors of a business to what is not theirs. When a producer produces a product or services of his/her own, the rights to those are his/hers alone and not the consumers via so called competition.

    I bet that you didn’t defend Microsoft, when they were attacked by the State Department in the late 1990s/early 2000s for bundling its OWN Internet Explorer (IE) with its OWN Windows Operating system, did you? May I ask you, who owns IE & Windows? That’s right, they’re both the properties of Microsoft and no one should demand how it (Microsoft) can or can’t do with its own property. How would you feel, if someone turned up at your house, demanding that you paint it with a color of his choosing since it irritates him whenever he drives past your street? I bet that you would tell him to f**k-off? Your property is no different from Microsoft’s intellectual properties. If someone tries to tell you (or Microsoft) of what you can or can’t do with your property, you would be furious, wouldn’t you?

    I think that you’re not defending property rights (owners of the properties), you’re defending consumers (the user of someone else’s properties). I suggest you read the article I pointed out in my previous message, then come back to refute it. You pointed to Rod Drury’s post, but there is nothing in there to refute of what the article I pointed out to you described.

  • Falafulu you bet wrong – I very rarely tell anybody to be on their bike in the terms you describe. However, I understand what you’re getting at.

    There is a lot of confusion about property rights in a digital age. For example, somebody buys a cd of music. Is it theirs to sell? Can the music be sold once if the cd is destroyed? Can the music be copied onto more than one device for the purchasor’s sole enjoyment. And if the cd is damaged, can it be replaced for the cost of a blank cd?

    I have certain issues with property rights when they are used coersively and in order to stifle competition. I object to the way Microsoft employs its dominant position in the marketplace to destroy innovation and some would say stead other peoples’ property.

    I had a quick look at the article you linked. In it, the author says:

    “it is Microsoft’s incredible efficiency and productiveness that allows it to undersell its competition yet still make large profits. Again, this represents not criminal behavior but real virtue.”.

    Has it ever occurred to the author that Microsoft is not as “incredibly” efficient and productive as he thinks? Being able to manipulate pricing due to being a multinational company or sustaining a loss through massive internal subsidy do not equate to any sense of “virtue” in my books: neither real nor virtual “virtue”.

    Sorry – the link to RD’s post was more of a suggestion to see something funny amidst the seriousness of everyday life. Remember, though, that within most good jokes there is a hint of the truth.

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