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Google Offers to Help Yahoo! Fend off Microsoft?s Unsolicited Takeover Bid

By IBLS Editor

Google Inc. Chief Executive Eric Schmidt called Yahoo Inc. CEO Jerry Yang to offer his company's help in any effort to thwart Microsoft Corp.'s unsolicited $44.6 billion bid for Yahoo, say people familiar with the matter," Kevin J. Delaney and Matthew Karnitschnig report for The Wall Street Journal.

"The approach Friday from Google -- Microsoft's chief rival on the Internet -- came as Yahoo is assessing its options for responding to Microsoft's aggressive 'bear hug' bid, which has sent aftershocks through the media and technology industries since its announcement three days ago. People familiar with the matter say Yahoo's board, which conferred by telephone Friday, hasn't taken a position so far and no rival bids have emerged yet, though it remains possible some will," Delaney and Karnitschnig report.

"It is considered unlikely that Google would itself bid for Yahoo because of regulatory concerns related to their large shares of the search and online advertising markets. But the people familiar with the matter say Google could play a role in attempts by others to outbid Microsoft, or by Yahoo to remain independent. Google could potentially offer money, or guaranteed revenue in return for a Yahoo advertising outsourcing pact, under that scenario, say people familiar with the matter. Even such involvement by Google would likely attract antitrust scrutiny because of concerns that competition between the two Silicon Valley Internet companies could be reduced," Delaney and Karnitschnig report.

Delaney and Karnitschnig report, "Google Senior Vice President David Drummond in a blog post asked whether Microsoft could 'now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC.' Mr. Drummond accused Microsoft, which has been targeted by antitrust regulators in the U.S. and Europe for years, of 'frequently [seeking] to establish proprietary monopolies -- and then [leveraging] its dominance into new, adjacent markets.'"

Delaney and Karnitschnig report, "While Google and Yahoo are intense rivals in those areas, they share deep roots in Silicon Valley, whereas Microsoft is a plane ride away in Redmond, Wash. Mr. Yang, a Yahoo cofounder, has been opposed to a sale to Microsoft in the past, and some at Google believe it should try to help, say people familiar with the matter."

Full post as published by IBLS Internet Law Blog on February 04, 2008 (boomark / email).