Microsoft Speaks Out Against Google-Yahoo! Deal

Speaking before a congressional subcommittee today, Microsoft Senior Vice President And General Counsel Brad Smith said that Yahoo!'s recent Internet search outsourcing deal with market leader Google would harm online competition and innovation. The executive also questioned the legality of the deal.

"If search is the gateway to the Internet, and most believe that it is, this deal will put Google in a position to own that gateway and the information that flows through it," he said. "Never before in the history of advertising has one company been in the position to control prices on up to 90 percent of advertising in a single medium. Not in television, not in radio, not in publishing. It should not happen on the Internet."

"When Yahoo! talks about this deal generating up to $800 million in additional revenue, that's money out of the pockets of American businesses, big and small, who will pay higher prices for the very same ads they buy from Yahoo! today," he added.'

Smith outlined Microsoft's major concerns with the Google-Yahoo! deal:

- It will give Google unprecedented control--as much as 90 percent--of online advertising.

- It will provide fewer choices to online advertisers, forcing them to do business with Google.

- It will lead to higher prices.

- It will cede control of the Internet search market to Google, raising serious privacy issues.

"If one company, Google, controls up to 90 percent of online search advertising [that company] will have a complete picture of your online activities," he testified. "If that happens, Congress won't need to enact a federal privacy policy [because the country] will already have a national privacy policy: Google's privacy policy."

Microsoft, of course, has an obvious interest in the outcome of a federal investigation into the Google-Yahoo! deal. It is competing with both companies for online advertisers and has been engaged in a bizarre on-again-off-again attempt to acquire Yahoo! for most of this year.

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Ha ha ha - b00ble's response should be interesting...

sx4sport@hotmail.com July 15, 2008 (Article Rating:

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Take out advertising and throw in Personal Computer Operating System (PCOS)

"Never before.....has one company been in the position to control prices on up to 90 percent....of" the PCOS market.

Sounds familiar, doesn't it?

snedkronos July 15, 2008 (Article Rating:

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"Sounds familiar, doesn't it?"

Yup - they were taken to court, tried an convicted. They are now very closely scrutinized by the government for their past transgressions.

Does this somehow give Google the right to have an illegal monopoly?

jersey72 July 15, 2008 (Article Rating:

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Nobody should have any illegal monopoly. The case about Google is interesting, as much as Microsoft's Microsoft has been found guilty (and still is) of forcing the bundling of Windows with machines. Google could be found guilty of forcing people to use Google's advertising technology because there is nobody else in the market, or at least nnobody else big enough to probe useful.

In any case, I find Microsoft monopoly more endangering as it affects customers. Advertising business affects businesses, not end-users like me.

felipe.alfaro July 15, 2008 (Article Rating:

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"Advertising business affects businesses, not end-users like me."

really think so? so what kind of price do you put on your privacy?

XP

Waethorn July 15, 2008 (Article Rating:

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"Does this somehow give Google the right to have an illegal monopoly?"

Did I miss the news story where Google was found to have an "illegal monopoly"? If so, please point me to it, because I've missed that legal landmark.

No one has the "right" to have an "illegal monopoly", so your strawman question was clearly rhetorical. But it's also important to point out that Google is not guilty of what you allege.

A monopoly is not illegal per se. What IS illegal is using your monopoly status to stifle competition or manipulate the market. That's what Microsoft was found guilty of, and they're still paying that price today (as you correctly point out). To the best of my knowledge, Google has not been found guilty in any court of that kind of behaviour.

lotsamystuff July 16, 2008 (Article Rating:

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"A monopoly is not illegal per se. "

Ahh. Buying your way towards a monopoly is not illegal? hey haven't been convicted, but just because Microsoft owns 90% of the desktop OS market, doesn't mean Google should have the right to buy market share.

shark47 July 16, 2008 (Article Rating:

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The o/s comparison is hardly the same ting - there was always a choice for the consumer but nobody wanted a mac...

If b00ble owns all of the mindshare, then there is no way anyone could possibly compete, nevermind innovate...

At least they don't hide their software "products" in tird-party security updates - that would be pure evil...

sx4sport@hotmail.com July 16, 2008 (Article Rating:

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