Google says MS/Yahoo! merger may hurt internet

18 Mar 2008

A Microsoft acquisition of Yahoo! would be detrimental to the openness of the internet claims Google’s chief executive Eric Schmidt, commenting on the Redmond software giant’s dogged pursuit of the internet search firm over the past six weeks.

Microsoft has been hit with lawsuits in the recent past for anti-competitive behaviour, accused of abusing its dominant market position. The most recent was the record €899m fine imposed on the firm by the European Commission when it failed to comply with an antitrust ruling from 2004.

“We would be concerned by any kind of acquisition of Yahoo! by Microsoft,” said Schmidt.

He went on to say that he hoped any kind of deal between the two companies would be in the interest of the openness of the internet but that he doubted this would be the case.

Microsoft’s €44.6bn hostile bid for Yahoo! was made through an open letter to the company and its shareholders as a business proposition, claiming that the industry as a whole would be better served by one strong player in the form of Microsoft and Yahoo!.

While Google objects to this business combination, the internet search giant has come in for some bad publicity itself for a large merger with DoubleClick which was seen by some in the industry as anti-competitive and possibly an abuse of Google’s dominant position in the internet search and advertising market.

The DoubleClick acquisition was finalised last week when the European Commission gave its approval of the US$3.1bn deal.

By Marie Boran