February 4, 2008
Google’s half-baked Microsoft scare tactics
Google is going to have to do better than this if it wants to frighten regulators and politicians into blocking Microsoft’s $44.6bn bid for Yahoo.
It is a bit half-baked to issue a statement (actually, not even an official statement but a blog post, for heaven’s sake) that raises worries about Microsoft distorting the internet without providing evidence, or even explaining what it means.
David Drummond, Google’s chief legal office, asks rhetorically in his blog post:
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?
Umm, I don’t know. It would help if you could say how, Mr Drummond. I hope that Google mounts better arguments on the occasions it goes to court or it must face a lot of irritated judges.
Granted, Microsoft has used its dominance of PC software to exert a grip elsewhere, including its Internet Explorer browser. But it has shown no signs of being able to draw people away from Google, and I do not see how acquiring Yahoo would make much difference.
As Joe Nocera noted in the New York Times on Saturday, Microsoft is talking in modest terms about what it it expects to get out of buying Yahoo. Well, it would say that wouldn’t it, you might argue, given that it is likely to face scrutiny from regulators. But Google has an equally strong motive to stir up fears about the bid and to try to disrupt it.
Of the two perspectives, I find Microsoft’s more convincing. The reality is that Microsoft is still struggling to react to the challenges posed by internet services to paid-for software. The latter is its core business and has been since Bill Gates wrote to hobbyists demanding payment for software in 1976.
Acquiring Yahoo would pose lots of integration challenges for Microsoft, as Henry Blodget notes, before it could even start to take on Google. As for distorting the internet with the deal as Mr Drummond suggests, I remain to be convinced about that.
Given Google’s market presence, it might lead to people thinking about Microsoft tactics, although Google’s claims are hardly substantial. The other effect of issuing such a statement could be to sound of a warning to what Microsoft can expect from Google in coming days as Google would try relentlessly to prove its claims. I suppose, it wouldn’t affect Microsoft’s move or decision but I would watch closely this space - the build up is similar to last night’s Super Bowl game.
- Ganesh
Posted by: Ganesh Suryanarayana | February 4th, 2008 at 6:51 pm | Report this comment