Talking Schmidt

Google CEO Eric Schmidt says the world would be “better off” if Yahoo were to remain independent. And perhaps it would be–assuming you define “world” as “Google,” as Schmidt and the rest of Google’s executive leadership almost certainly does.

Speaking at the annual Allen & Co media conference in Sun Valley, Idaho, Schmidt said Yahoo did the right thing in rejecting Microsoft’s bid. “The moment we saw the offer from Microsoft (MSFT) we saw it as anti-competitive,” he said. “ … We absolutely support the decision that Yahoo made. There is no question in our view that an independent Yahoo is better.”

Of course there isn’t. Google (GOOG) controls an estimated 70 percent of search advertising. Microsoft and Yahoo together control an estimated 20 to 24 percent of the global search advertising market and 30 percent of the online display market. Were the two to combine, they might have a reasonable chance of narrowing Google’s runaway lead in online advertising. And the search giant doesn’t want that. It would much prefer its own partnership with Yahoo (YHOO), which, according to May data from comScore, would give it control of 83 percent of the U.S. search market. Now who could possibly call that anti-competitive?