Be Afraid, Be Very Afraid, Google Says

While Yahoo formulates a defense against Microsoft's hostile $44.6
billion bid, Google is showing much love and support to Yahoo -- a
company it generally regards as a competitor. Google's turnabout
suggests the seriousness of the threat Microsoft poses, and may give
the lie to Google's claims that a Microsoft-Yahoo combination would be
anticompetitive.

Google CEO Eric Schmidt
has reportedly been on the horn with Yahoo CEO Jerry Yang, trying to
iron out some sort of deal under which Yahoo will outsource its search
business to Google.

In the meantime, Google's chief legal officer David Drummond is blogging about the threat a merged Microsoft-Yahoo would pose to life, liberty and the pursuit of happiness.

"There are lots of levels of irony here," says Joseph Turow, a
professor at the Annenberg School for Communication at University of
Pennsylvania.

Google's interest is hardly altruistic -- it's more likely a form of retaliation against Microsoft for raising objections to its acquisition of DoubleClick.

The bickering between Microsoft and Google has gotten ugly,
culminating with Drummond's characterization of Microsoft's business
practices as "inappropriate and illegal." (And if you're keeping count,
Drummond used the word "openness" three times in his blog post, while Microsoft used the word once in its response.)

"The key thing to look at in antitrust matters is to see who is
complaining," says Stan Leibowitz, an economics professor at the
University of Texas at Dallas. "If consumers are complaining, there's a
good chance [that the deal] will reduce competition. And if the
so-called competitors are complaining, chances are good that [the deal]
will increase competition. The fact that Google's against [Microsoft,]
and it's the market leader, it would indicate, almost by its action,
that the market's going to be more competitive."

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