Google Cowardly Questions Microsoft's Bid for Yahoo

[Mimpy]

The Senior Vice President of Google has posted his thoughts on Microsoft's bid for Yahoo!. You can read it here.

The general idea of the Vice President's post can be summarized as such:

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.

I have always respected Google for its innovation, technology, and brilliant marketing. It not only is one of the "coolest" companies around, but it is also very good at what it does. This post, however, reveals a different side of Google that I had not encountered before. The Vice-President, speaking on behalf of Google, outrightly acccuses Microsoft of "extend[ing] unfair practices" and engaging in serious "legal and regulatory offenses." I grant him the fact that, yes, Microsoft was put on trial: their actions were deemed to be illegal. Morally supporting what the company had to endure, however, is cowardly, especially when coming from the one company that is most threatened by the potential alliance of Microsoft and Yahoo!.

The post tells me nothing more than Google is afraid of Microsoft's bid and is trying to convince anybody they can to morally denounce it so Google will not have to work as hard to compete with Yahoo!.

Edited February 5, 2008 by Mimpy

[West]

Microsoft did the same thing to Google when they purchased doubleclick. Sickens me every time I hear this sort of thing. Thanks Sherman Antitrust Act!

[cilphex]

I admire Google for their innovation and quality of products, but when it comes to competition they're pretty cowardly and hypocritical. They take advantage of their image as the "Good Guy" to make moral arguments against what they perceive to be threats to them, when it really isn't warranted. In practice they're pioneers of capitalism, but they preach collectivist values.

Edited February 5, 2008 by cilphex

[aequalsa]

Microsoft did the same thing to Google when they purchased doubleclick. Sickens me every time I hear this sort of thing. Thanks Sherman Antitrust Act!

It's comments like these that make it very difficult for me to feel sorry for them at all when they encounter antitrust nonsense. Getting fined, sued, or split up is the correct outcome in the "innocent" people who died in the train tunnel, sort of way.

[dan_edge]

Thanks for the heads up, Mimpy. You can email Google's blog here: [email protected]. Here's my letter to the author of that blog post:

-------------------

Mr. Drummond,

Your blog post of 2/3/08 regarding Microsoft's bid for Yahoo! is a cowardly statement undeserving of a great organization like Google. Microsoft, Yahoo!, and Google are all successful companies that have thrived because we live in a society that still values free market capitalism. For you to state that Microsoft's actions imply "illegal" and "unfair" intentions is beyond the pale. Microsoft is a business which competes with other businesses to generate a profit.

Your letter makes clear that Google's leadership is afraid of fair (unregulated) competition with Microsoft. Instead, you would encourage the government to force Microsoft out of the search engine market. And this in the name of "openness and innovation." What a cowardly act! In your letter, you are more or less openly advocating government intervention to prevent a strong competitor from entering your market, and you do this in the name of "openness and innovation"? I have to call BULLSHIT on that, Drummond.

Google may be an excellent company now, but with leadership like this, it will never succeed in the long term. If Google's answer to competition is to cry "Monopoly!", fall to its knees, and beg for government intervention, then its history of innovation will rapidly become a legacy of incompetent and cowardly corporate leadership.

--Dan Edge

Edited February 5, 2008 by dan_edge

[Galileo Blogs]

If you look at the history of antitrust, you will find that most of the lawsuits are instituted by businesses against their competitors. Such history belies the alleged purpose of antitrust, which is to protect an imaginary "consumer welfare" that only exists on blackboards in economics classrooms. The consumer welfare concept is an outcome of the theory of perfect competition, which posits an imaginary hypothetical world where information is costless and barriers to entry non-existent. Using the unreal as the standard, the trust-busters decry that the real world does not conform to their imaginary world, and demand to use force to make it do so.

In practice, all this means is that successful companies are punished. Such punishment is arbitrary, essentially coming out of the blue based on a complaint by a competitor or activism by a politically ambitious bureaucrat or public official (e.g.: Teddy and Franklin Roosevelt's persecution of the "great malefactors of wealth" such as Standard Oil Company). In fear of such arbitrary terror, America's most successful companies must hamstring themselves, avoiding potential acquisitions or aggressive but creative business moves, in order to avoid this persecution.

It is sad, indeed, that Microsoft and Google, two titans of the computer and Internet worlds, fail to understand the nature of antitrust and to understand that they are only targeting themselves every time they pick up the antitrust weapon.

[DragonMaci]

The thing is Microsoft couldn't extend their so-called "immoral" practices of using their dominance to the internet if they acquired Google; Yahoo! and Microsoft combined have about 30% of the US search engine market and 10% of the European search engine market, while Google has about 65% and 86% respectively, so the combined Microsoft-Yahoo! wouldn't have the power to do as Google claim they would.

Google further claim that Microsoft would make the Yahoo!'s services only work on Windows and only in IE7. That claim totally ignores the fact that Microsoft are moving away from that old internet strategy that they used to have. With a few exceptions,such Microsoft Update, most Microsoft sites don't care what browser or Operating System you use. Furthermore, Microsoft's latest net technology, Silverlight is OS and browser agnostic; it works with Mac and Windows, and will soon work with Linux, and works with all properly coded browsers.

Google have also said Microsoft would stifle innovation, especially Yahoo!'s if they bought Yahoo!. This ignores the fact that last year alone Microsoft spent USD7 billion on R&D. That is more than ten times Yahoo!'s profit margin for last year. Furthermore, it ignores the fact that Microsoft is already well under way on working with Wave 3 of Windows Live despite Wave 2 still being young, and Wave 2 didn't come out long after Wave 1. And Google are one to talk: they haven't done any innovation on their search engine for a long time, and Gmail innovation has slowed down a lot. I haven't heard of any other areas where Google have innovated; their online office apps are nowhere near a real threat to Office and that shows no sign of changing, and their software (Google Talk, Google Toolbar, Google Earth, Google Desktop, etc) haven't been updated in a while, especially Google Toolbar for Firefox. Google Talk is and always has been utter crap, but they show no interest in improving it beyond recently adding some new emoticons. Where is Google's innovation? Seems Google are being hypocrites.

In short, Google's statements are a total load of bull. As has already been said in this thread, Google are simply scared of a real competitor arising. The worst part is that at just 30% of the US market and 10% of the European market compared to Google's respective 65% of 85% market shares, Microsoft-Yahoo! still wouldn't be much of a competitor to Google. Google has 75% of the international search engine market, which doesn't leave much room for Microsoft-Yahoo!.

[DavidV]

Google's complaints about the Yahoo/Microsoft share "of instant messaging and web email accounts" attempt to hide by ommission the fact that the vast majority of Google's and Yahoo's profits come from advertising:

Research firm eMarketer says Google took 75% of U.S. paid search advertising in 2007, up from 60% in 2006. Yahoo, ranked No. 2, raked in 9% share, with other search engines splitting the 16% of the pie.

Edited February 5, 2008 by GreedyCapitalist

[Chops]

Google products are amazing. Google's politics are nothing short of bankrupt. I've felt this way ever since Google came out as a major supporter of Net Neutrality.