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Non-Surprise of the Day: Google Sees Microsoft Bid for Yahoo as “Troubling”

February 4th, 2008

google-yahoo-microsoft.jpgUnless you have been living under a virtual rock (or is the proper term “asteroid” since we’re posting in cyberspace) for the past week, you probably know by now that Microsoft has made a $44.6 billon bid to buy out Yahoo and merge the two companies. This article at CNET News.com has a pretty good recap of the relevant events if you need to catch up on the latest news.

Meanwhile, on the official Google blog yesterday, Google’s senior vice president David Drummond was less than thrilled about the merger proposal and expressed concern that another Microsoft acquisition could cause problems for people who want a more innovative, open market style Internet:

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.

This is not surprising because it is clear from Microsoft’s letters and statements that it seeks to compete more seriously with Google in the search engine market by essentially swallowing up Yahoo and combining the two companies’ market share. The combined company would have more resources to scale up its computing power and provide both search results and advertising markets that are more comparable to Google’s current services.

Although the merger would create a more powerful company, significant challenges would remain in attempting to integrate the various web applications of both companies. Interestingly, as this article by Rafe Needleman points out, Yahoo may wind up winning out in some respects because most of its current platforms and applications either function better or are simply better known and marketed than their Microsoft counterparts.

Finally, while reading about Yahoo’s reaction to Microsoft’s proposal, I ran across this little tidbit from MarketingPilgrim.com earlier today. Apparently an internal email from one of the Microsoft executives leaked out, and it provides a little more insight into the proposed merger. The post author points out that some of the language in the email seems to suggest that Yahoo has already accepted the bid. It is hard to tell whether this is simply arrogance on Microsoft’s part or perhaps a sign that a deal has already been made behind metaphorical or actual closed doors.

For whatever it’s worth, I have noticed a significant increase in this site’s search rankings and traffic volume from Yahoo over the past week or so. During this same period, the MSN traffic initially experienced a nice little spike but has now dropped back down to previous levels over this past weekend. While it seems unlikely that the proposed merger has anything to do with this, based on my traffic stats it certainly looks like I should be rooting for Yahoo.

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