Google Response To Microsoft Monopolies

Posted Tuesday 5th February 2008 by Tom P in SEM News.

The intended buyout of Yahoo by Microsoft for almost £23 billion has caused outrage in the Google camp. Immediately calls for the business deal to be scrutinised by industry regulators have been made. Google’ s primary argument rests upon the access of email and messaging services not being open enough for consumers. In a direct assault they have stated that Microsoft is attempting to establish another monopoly.

Microsoft have rubbished the claims arguing that there move to buy Yahoo is purely to create a ‘number two’ search engine large enough to compete with Google. Why is this deal being so fiercely contested? It is all down to the increased profits predicted in the online marketing industry and how Google currently dominates the market.

Google’s senior vice president, David Drummond has further elaborated on allegations by stating the move to purchase Yahoo is more than a simple financial transaction. Mr Drummond believes the move goes against the principles of the internet, arguing that openness and innovation will doubtlessly suffer if the buyout is completed. He further stated that Microsoft has repeatedly attempted to establish monopolies then use its technological clout to influence adjacent markets.

Microsoft will not want anymore investigations into their business practises; they have recently lost appeals over fines in the millions and the financial toll is beginning to become apparent. Despite the funds at Microsoft’s disposal it is believed that the company will have to take a loan to complete the buyout of Yahoo. This is the first time the company has had to borrow money to complete a financial transaction; showing the importance Microsoft is placing on the move.

Yahoo however has rocked the boat with rumours that they will consider an alliance with rival Google. Although it is doubtful any such move will occur it will be enough to frighten Microsoft that they are not the only company showing an interest in Yahoo; AT&T and Time Warner have also been named as prospective buyers.

Whatever the outcome in this financial battle it is clear that any buyout of Yahoo will shake the internet industry down to its foundations. With such a ferocious war of words already in existence, the ownership of Yahoo will be a matter of debate in technological circles for some time.

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