February 3rd, 2008
Google’s Pot, Microsoft’s Kettle Exchange Volleys Over Yahoo!
By Michael Santo
Executive Editor, RealTechNews
Google’s Pot, Meet Microsoft’s Kettle.
For years Microsoft was the “Evil Empire.” Court decisions and the emergence of Google have passed the mantle of the “most feared tech company” onto that newcomer. That said, perhaps still stung by Microsoft’s lobbying against the Google - DoubleClick deal, Google posted a blog entry full of rhetoric, pretty much assuring all of us that any Microsoft - Yahoo! deal will be strongly contested.
In the post, titled “Yahoo and the Future of the Internet,” raises troubling questions.” He says:
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.
Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets.
But then Drummond goes on to mention the “overwhelming share of instant messaging and web email accounts” that a merger would create, and that “the two companies operate the two most heavily trafficked portals on the Internet.” Yeah, so? He further says:
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?
Whoa, I get it. You’re talking about net neutrality. And that shows this post for what it is: a FUD post (Fear, Uncertainty, Doubt). Is any of this something we should really worry about?
First, I’d be more worried about the U.S. government and corporations combining to stifle net neutrality (as in Ted Stevens and his “tubes.”
Second, although such a deal wouldn’t be easy to complete, most analysts believe it would be allowed to happen, because much of the deal is about Search and Advertising, and no matter what Google says, it has the lion’s share of that market.
Not to be outdone, Microsoft General Counsel Brad Smith posted a short response, which points out some of the FUD-ness in the Google post.
Today, Google is the dominant search engine and advertising company on the Web. Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65 percent search query share in the U.S. and more than 85 percent in Europe. Microsoft and Yahoo! on the other hand have roughly 30 percent combined in the U.S. and approximately 10 percent combined in Europe.
On the other hand, he went on to say that “Microsoft is committed to openness, innovation, and the protection of privacy on the Internet.” That part, I’m not so sure of.
And just think: Yahoo! hasn’t even accepted the offer! The fireworks haven’t even started yet.
