Google has posted a missive on Microsoft’s attempted takeover of Yahoo where it cries wolf against the deal based on (I’m serious here) competition grounds.
David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer at Google writes:
…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?
Google, a company with “an overwhelming share” in text ads and search who can take advantage of its dominant position in search to unfairly limit the ability of consumers to be listed fairly is concerned that Microsoft and Yahoo might do a similar thing with email and IM? cough*lol*cough.
To be fair there may be some legitimate competition concerns with the deal, but Google pointing them out will only serve to remind people (and more importantly Governmental Regulatory Authorities) that it doesn’t matter how much bigger and stronger a combined Microsoft/ Yahoo is, Google is still the 1000 pound internet Gorilla in the room.
This goes to show that perhaps the Yahoo/microsoft deal is worthwhile.
Too many people have pointed at without looking at the indepth stuff to comment that google will always rain supreme or the yahoo/MS deal is pointless .
Good to see google being threatened , even if its a yahoo/ms convergence.
Yahoo could be such a force , all they have to do it spend a little more on improving their search engine. They have so much talent .
He does raise some good points… but you are right Google really has no reason to complain at all.
Google – are you really so threatened or are you the wheel that wants to be heard?
I think regulators would laugh at Google at this point. What a joke. Sounds like sour grapes to me. GO M$
I would really like to see this deal go down.
I think it is obvious that google does not want to seem happy about this. (although they have every reason to be) Additionally, if they can get yahoo’s or microsoft IM/email branches to be sold off before the merger as a regulatory term for the deal to go through, even more power to google. These are the two aims that this blog posting (and i assume the general strategy Google will follow in terms of this aquisition) serves.
Apart from this, google having a superior position in search/advertising doesnt stop them from pointing out potential problems with the email/IM side of things. If the argument is valid, then whay does it matter where it comes from? Isn’t attacking the person (or organization) with the opinion instead of the opinion itself considered an ad hominem attack and hence a form of bias?
It would be great if Jerry Yang would use the Yahoo Answers to ask the Yahoo! Users what thinks about Microsoft bid.
I hope the deal go down.
This from the same company that sued Microsoft over *desktop* search on its own OS?
I’ll say it again as I’ve said it before: Google is a one-trick pony. Granted, it’s a hell of a trick, but it’s not worth $700 per share, as “the market” has already figured out. And while I’ll grant you that the geek set gets worked into a lather over GMail, Google Earth, and Google Gears, the fact is that not one of Google’s products other than search (and maybe Google Maps) has really resonated with the average Web user.
Yahoo and Hotmail both have more users than GMail, and both have consistently out-scored GMail in recent (within the past 18 months or so) tech lit reviews and end-user surveys.
Google has been rightly taken-to-task for the very poor job it’s done supporting and updating Blogger.
Orkut – what can I say? I don’t speak Portuguese. And neither do most of the people on Earth.
Google Answers – dead.
Froogle – dead.
GoogleTalk – used by a subset of GMail users (see above).
iGoogle – also-ran start page. Pageflakes and Netvibes gets better press, and MyYahoo! has a larger user base.
Picassa – Nice. Also acquired. Also primarily a client application – you know, those legacy things that Microsoft is derided for by all the Google fanboys who know the future is the Webtop, not the desktop OS.
Android – vapor-ware. YahooGo! 3.0 is already here, and runs on Windows Mobile 6, the dominant smartphone OS.
OpenSocial – vapor-ware. All participants are also-ran social networking sites.
Google isn’t everything it’s cracked-up to be, and Google knows it. This is the proof.
Go Microsoft Go! Kick Some Google ass. Im so tired of them and their Birkenstock wearing “Do no evil” motif.
“It’s about preserving the underlying principles of the Internet: openness and innovation.”
In that case can someone tell me what the revenue share is between Google and AdSense customers?
OK Google so Microsoft will back out of this obvious monopoly play and you’ll do the same w/ doubleclick?
I smell having your cake and eating it too
Duncan,
Stop using your space on techcrunch to please Arrington by playing his favorite game- Google bashing
There is not an iota of value that post adds to the main conversation. And it just makes you look (or prove) that much more stupid.
Techcrunch is getting sicker and more and more worthless by the post.
I love the way that all of the major tech companies can say that the others are doing illegal activities, and they’re all completly right!
Love or hate Google, I do think they take “internet openness, choice and innovation seriously.” These are valid concerns that do need to be addressed.
Great read.
This coming from a lawyer at Google. I think because he’s a lawyer and taught to spin and argue in law school that he neglected to mention that Google itself controls 60% of the entire global search. OR is he just delusional and a “victim”?
in Aikido they say that the best defense is no defense..and G goes further
ak
Move on to some other blog and grow the hell up
Duncan, I’ve read the letter and I don’t see anywhere in there where they said that a Microsoft and Yahoo combination would hurt Google. In fact I think such a merger would tickle Google pink with the almost certain promise of Yahoo and Microsoft failing miserably. However, they are correct in the thought that such an enormous web mail combination could raise privacy fears (especially in Europe where they hate Microsoft already). In terms of this being anti-competitive for search, I highly suggest you talk to insiders at Ask, Wikia, Powerset and others. They don’t have a hope in hell of making any headway in the search market. I can’t imagine that they are happy about this. Microsoft won’t hurt Google but it will hurt the rest.
Keep in mind that Google was not the first search engine nor were they the pioneer of the PPC advertising model. They were and still are innovative and built a better system and gained a “natural” monopoly. By giving the people what they want, they became a giant and global favorite. Now with the possibility of 2 companies having around 90% of the search engine market, the possibility of someone becoming the next Google is laughable.
Microsoft on the other hand can’t innovate to save their life. Everyone is sick and tired of them and most people want this deal to go through just so it will be the final nail in a heavily bloated coffin. Does anyone actually think Microsoft is a genius for wanting to buy Yahoo? It reeks of desperation. The all mighty Microsoft can’t compete because they have a terrible search engine and no one wants to use it. Yahoo should stick it to them, forget the deal and watch Microsoft writhe like a fish out of water. Accept the deal, watch the thousands exodus from Yahoo to Google and the combined company still won’t have a chance at dethroning Google.
saw it and could NOT believe what i was reading.
oh, and quite entertaining: it has already been translated into “Plain English” for layman reading: http://tinyurl.com/yrh7pu
given that MSFT’s real interest is search and the ad network, Y! could easily spin off email and IM to mitigate the possibility that this raises any DOJ eyebrows
When will folks rally against Google the way they rally against Microsoft? How much of a monopoly must one have — how many billions must one make in profit, before the revolt happens?
no news and nothing to see here… just some (mild) posturing by google to eke out some concessions. Standard stuff every competitor does in an situation like this.
Pot calling the kettle black methinks!
Google is going down and they know it. The end of google is nigh…
Not to make this an investment site…but do you think msft will end up paying more then the $31 a share based on the over all price already dropping based on the price of msft shares which will be part of the pay off to yahoo share holders….and does anyone think Rupert will jump in?
#21 – when? when Google starts acting evil like Microsoft does.
You can be jealous of the insane success Google has had, but if they had the usual grubby bottom feeding management like the rest of the corporate USA (eg see Microsoft, or your horrendous Telco’s) the internet would be much worse off.
MS is a convicted monopolist with a pretty bad track record. It still has pending antitrust lawsuits against it.
Google isn’t a convicted monopolist, or has any anti trust lawsuits against it. I know you guys love to call Google a monopoly but since when getting 60 % of something (search) make it a monopoly. Don’t you have to have like 90% to be a monopoly
Us regulators have already oked the Double click deal and according to reuters, the EU will do so too. Plus EU is more concerned about privacy issue related to the deal and not how big they would become.
I don’t see the sour grapes stuff here, it’s a valid concern
Read this document very carefully:
http://www.usdo...xhibits/684.pdf
Every compatitor will afraid a merge like that…
So google make his job to avoid it…
Google is too big to keep the whole “do no evil” together. However, Google is a good incubator for ideas. Microsoft also has done the same for ideas.
I was not happy with Steve Ballmer’s approach to the whole Yahoo! deal. He promised to come back again and again with a higher bid. That’s being a bully. He is going to push off the very people he needs from Yahoo!
Why doesn’t Google go for Yahoo? It would be a nice way to make Microsoft pay a lot more for their tasteless act.
Its not only about search…
Yahoo and Microsoft control almost 90% of the webmail industry when you combine Yahoo! mail, Hotmail, MSN, and Live.
Similarly, Yahoo and Microsoft control a similar share of the instant messaging services. The industry has finally began to interoperate with IM protocols, such as the deals with Google’s adoption of Jabber (an open protocol). Does anyone really believe Microsoft would not leverage the massive IM marketshare after aquiring Yahoo! to block interoperability and open standards?
Its not just search…
I cant believe I am saying this but here it goes, fuck google.
Let Yahoo! and Microsoft merge and combine their search market share, but I hope regulators force Yahoo! to first divest their IM and Webmail services to prevent Microsoft from gaining monopolies in two more services that Internet users depend on….
A good deal for internet users, would be to sell off Yahoo! IM and WebMail and other services to IAC, then sell the search and advertising pieces to Microsoft. It would create more competition and avoid creation of damaging monopolies.
Again, Google is taking the moral high ground by defending the interest of web surfers. In fact, the only interest being defended here is their own.
@17 – I second your suggestion.
Them and the people who continuously point out non-material typos and mispellings.
Also the index of all evidence. They did some pretty slimy stuff.
http://www.usdo...ms_exhibits.htm
This is just as interesting as Google + DoubleClick. All major mergers should be looked at, regardless of who or what.
Perhaps Google is putting on a great show?
Every Techmeme story is how the merger wouldn’t work, Microsoft will kill Yahoo’s great services, blah blah blah.
So if I’m Google, and I want this deal to happen, what better than to come out against it, which I have no incentive to do? Because now I can make everyone fight for it, even though we all know it’s a bad idea.
There is one very smart point being made here (Kelli if I may quote):
“Duncan, I’ve read the letter and I don’t see anywhere in there where they said that a Microsoft and Yahoo combination would hurt Google. In fact I think such a merger would tickle Google pink with the almost certain promise of Yahoo and Microsoft failing miserably.”
The odds of Microsoft failing to monetize on the new assets is quite big. It gives them greater critical mass of users but the questions really remains how will they intend to make it return, Yahoo hasn’t been doing a very good job on that, MSN has been little more successful. Google has a great cash cow in paid search as long as it lasts but I think there is change on the horizon and it may not come out of Google.
I don’t like the idea of the takeover because it brings us closer to the question if internet will or can remain free for everyone.
Duncan: “Google, … who can take advantage of its dominant position in search to unfairly limit the ability of consumers to be listed fairly is concerned that Microsoft and Yahoo might do a similar thing with email and IM? cough*lol*cough.”
To be fair to Google, their IM system uses Jabber – an open standard. Both Yahoo! and Microsoft have proprietory protocols which have the effect of locking people in. With Google, you can use their IM systems and not be locked in to their tools. MS and Yahoo! have both twiddled with their protocols deliberately to break other independent clients.
That is indeed a point of concern. How many great ideas for using instant messaging have suffered because of closed protocols that divide audiences?
The key is the $6.4 billion in search revenue Google makes compared to 2nd place Yahoo with $1.6 billion.
“Google, a company with “an overwhelming share” in text ads and search who can take advantage of its dominant position in search to unfairly limit the ability of consumers to be listed”
They could, but they will never do this. And we know this. Google is trusted.
“is concerned that Microsoft and Yahoo might do a similar thing with email and IM?”
Yes, ’cause they are able! Microsoft is able! And it WILL! (it showed us already) That’s the point.
Google made the best search – and people CHOOSE Google. Imagine you can’t choose on Internet as you couldn’t on PC just a few years ago.
So this is not about Google vs. Microsoft. It’s about “preserving the underlying principles of the Internet: openness and innovation” – as they wrote. I totally agree with Google.
I think Drummond raises some real issues that have to be taken seriously. I think there will be more innovation in the web space with Yahoo!, Microsoft and Google competing than with with just two players.
But long term Microsoft/Yahoo! could pose problems but not straight away because I think Google is far ahead already esp. in search revenue terms.
#8 you have no idea what you are talking about. G-Talk runs off the well-known jabber chat system. Its used by a whole lot more than you think. But your probably a Microsoft certified know it all and wouldn’t know a thing about real innovation. Bill Gates is the world’s biggest software pirate ya know.
#18 I’m pretty sure Microshaft is fully aware of the affects this take over would have on the smaller competitors. They only want to make that gap between them and google closer. Maybe they feel if they get that close they could have a chance…
@38 EJB of course you can quote and that was my point. If this goes through, this will result in big layoffs as any M&A does and where will those smart people go? Google or Facebook. They will also lose the super smart kids coming out of Stanford to Google or Facebook.
Microsoft has always made complimentary acquisitions but this is the first time they are making an acquisition of a company exactly like it (and better than it). They will have 3 search portals, 2 major webmail destinations, 2 financial portals, 2 IM clients, 2 dating websites and of course, 2 ad platforms.
Please keep in mind who is making the offer. Microsoft said in their teleconference that they love the Yahoo brand, they didn’t say anything about the technology. The odds of Microsoft buying Yahoo then using all of their technology is unlikely, they will be cutting a lot of areas from Yahoo. Any bumbling will only force people to Google for everything they went to Yahoo for.
About openness, Microsoft can have it such that, Microsoft fully closed. Yahoo fully open. That works. “One Country Two Systems” works for Hong Kong.
Regarding Microsoft’s Bids to Buy Yahoo
Microsoft CEO Steve Ballmer is presently under the influence of Neptune “negative” Jupiter. This influence governs the unrealistic, impractical, and shows no workable plan for success, the influence is purely emotional. This influence also shows a disregard for morals, ethics and values, which reflects the “take over” tactics of Microsoft as Yahoo begins layoffs and restructuring within. The chart of Steve Ballmer indicates that he is making a “big” mistake in timing and planning that will harm Microsoft.
This means Google definitely sees this potential union as a threat.
@39 Isofarro: you’ve completely mis-stated the “lock in” argument. Whether or not Yahoo or MS uses a proprietary implementation for IM is irrelevant — it’s whether or not they allow other networks to pass messages back and forth. Remember years ago when MSN and AOL were going back-and-forth on a daily basis with authentication jumps to each other’s networks?
The fact that Google uses a published protocol means squat — you still have to authenticate to their servers. The fact that Yahoo and MS use their own dedicated clients is as irrelevant as is the capacity to create your own client for Google. (Never mind how many people are actually going to do this…)
The lock-in is at the server, not the client. And no one on the above list is in any different position from the other.
What the hell is wrong with everyone?
Has everyone forgotten that Microsoft abuses monopoly power and uses all the dirty tricks in the book?
Google may have monopoly power in search but have they abused it? I dont’ think so. They have not pulled any dirty tricks. As far I’m concerned, they are far from evil.
Would you trust the keys of the internet to Microsoft or Google?
Come on people, refresh your memory.
someone I think is afraid