When Giants Clash

Mr Softee’s unsolicited bid for Yahoo has the cyber-megalomaniacs dithering.  Google has launched its opening salvo to brand the deal as illegal.

AN FRANCISCO (AP) — Google Inc. raised the specter of Microsoft Corp. using its proposed $42 billion acquisition of Yahoo Inc. to gain illegal control over the Internet, underscoring the online search leader’s queasiness about its two biggest rivals teaming up.

he critical remarks, posted online Sunday by Google’s top lawyer, represented the Mountain View-based company’s first public reaction to Microsoft’s unsolicited bid for Yahoo since the offer was announced Friday.

“Microsoft’s hostile bid for Yahoo raises troubling questions,” David Drummond, Google’s chief legal officer, wrote. “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.”

Troubling questions indeed insofar as it represents a real chance at competition for the First Amendment scoffing prattlers of open information.

I’m not sure what Yahoo will do with the bid but it seems likely that an offer of four times the current market cap will entice not just of few of Yahoo stockholders.  And for the consumer it might make sense as well in that Microsoft has the capital to dedicate to innovative improvements in search technology. But, if Yahoo thinks the deal is bad – which they might – they get my vote.  I think, however, they need to take it to the stockholders.

I’m no fan of Microsoft but I have constantly defended them against anti-trust persecuition. And I’ll say for the record here that if the DOJ gets in the way of any potential deals they do so at the risk of empowering Google and stifling competition.

And what does the market think of the deal.  GOOG dropped 9% on Friday to $515.90.  That, after the market realized that their bullshit growth projections were, shall we say, pie in the sky.  Google is off it’s high of $747.24 set last November.  Maybe the Google boys will be forced to reign in their lifestyle a bit and sell off those (green?) 747’s that they use for personal travel.

This acquisition will be good  for consumers – regardless of how much disdain I have for Mr. Softee.

This entry was posted on Sunday, February 3rd, 2008 at 10:40 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed.