Google not happy with Microsoft-Yahoo bid

February 4, 2008 7:05:03 AM PST
Google, Inc. has finally gone on record on Microsoft's unsolicited bid to purchase Yahoo, Inc. And not surprisingly, the internet search behemoth doesn't like it one bit.In fact, Google published a statement on its web site, saying the $42 billion dollar acquisition of Yahoo would give Microsoft illegal control of the internet.

Microsoft has been looking for ways to compete with Google, and decided last week that teaming up with Yahoo would be its best chance.

"Microsoft's hostile bid for Yahoo raises troubling questions," David Drummond, Google's chief legal officer, wrote. "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."

The Wall Street Journal says Google CEO Eric Schmidt called Yahoo CEO Jerry Yang on Friday, February 1 to offer help in repelling Microsoft. That assistance did not include a counterbid, according to the newspaper, but may involve supporting other takeover bids.

Redmond, Washington-based Microsoft has been trying to depict a Yahoo takeover as a boon for both advertisers and consumers because the two companies together would be able to compete against Google more effectively.

A combined Microsoft-Yahoo would gain about 16 percent of the worldwide internet search market. Google currently has 62 percent. However, Microsoft and Yahoo are way ahead of Google in e-mail and instant messaging.

Most analysts believe Yahoo will have little choice but to sell to Microsoft. Yahoo's stock price is near a four-year low; its profits have been falling since late 2006. Microsoft's offer was 62 percent above Yahoo's market value when it was first announced.