John Paczkowski

Recent Posts by John Paczkowski

It's Really a Choice Between the Lesser of Two 'Don't Be Evils'

fud.gifOh, it’s on now, boy. It’s on.

Google has finally made an official comment on Microsoft’s unsolicited $44.6 billion bid for Yahoo and, as one might imagine, it’s not a ringing endorsement. In a statement yesterday posted to the company’s blog, Google’s chief legal officer, David Drummond, argued that a Microsoft-Yahoo merger “raises troubling questions” and would pose significant competitiveness issues.

“Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” Drummond asked. “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?”

Then, noting that Microsoft and Yahoo operate the two most widely used Web portals, he asked if a merged company might limit the ability of consumers to freely access competitors’ email, IM and Web-based services. “This is about more than simply a financial transaction, one company taking over another,” he concluded. “It’s about preserving the underlying principles of the Internet: openness and innovation.”

And remember kids, you can make money without doing evil–especially if you have more than 70% of paid search revenues worldwide …

Quite a letter, and one full of the sort of FUD (fear, uncertainty and doubt) and faux altruism normally associated with Microsoft missives. The software giant, of course, was quick to take exception. The company issued a terse statement yesterday refuting Google’s protests, arguing that a merger of Yahoo and Microsoft will create a stronger rival to Google. “The combination of Microsoft and Yahoo will create a more competitive marketplace by establishing a compelling No. 2 competitor for Internet search and online advertising,” Brad Smith, Microsoft’s general counsel, wrote. “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% of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65% search-query share in the U.S. and more than 85% in Europe. Microsoft and Yahoo, on the other hand, have roughly 30% combined in the U.S. and approximately 10% 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.”

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