Google cries foul over Yahoo bid

Google has attacked Microsoft's bid to take over Yahoo, saying it could allow Microsoft to "extend unfair practices" to the world of the web.

In an official response to news of Microsoft's £22bn offer to buy Yahoo, which broke on Friday, Google has expressed concerns that Microsoft plans to monopolise the internet.

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

According to Google, Microsoft's past actions in the software and operating system markets sets a worrying precedent.

"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," Drummond said.

Microsoft's general counsel, Brad Smith, dismissed Google's attack.

"Microsoft is committed to openness, innovation, and the protection of privacy on the Internet. We believe that the combination of Microsoft and Yahoo! will advance these goals," said Smith.

Analyst David Mitchell at Ovum said that a Microsoft-Yahoo deal would level the playing field.

"The combined Microsoft and Yahoo business is still likely to be a much smaller player than Google, although they will have substantially improved their ability to compete," he said.

Mitchell also noted that the messages Google, Microsoft and Yahoo sent out in their press releases didn't tell the full story.

"The market has become used to negotiations being held through proxy posturing in the press, and it is likely that a lot of decisive words will be exchanged through the press while a form of realpolitik carries on behind the scenes," said Mitchell.

And in an interesting twist, a Wall Street Journal report that appeared over the weekend suggests that Google may have contacted Yahoo to propose an alternative takeover to repel Microsoft's bid.

What do you think of the news that Microsoft wants to buy Yahoo?

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