Google Moves To Stop Microsoft
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Google has moved to try and stop Microsoft getting access to online portal Yahoo from an unsolicited $50 billion bid for the company.

Google chief executive Eric Schmidt has called Yahoo! CEO Jerry Yang to offer his company’s help in any effort to thwart Microsoft’s unsolicited US$44.6 billion bid, according to The Wall Street Journal.

The approach came as Yahoo! assessed its options for responding to Microsoft’s aggressive bear hug. Yahoo!’s board hasn’t yet taken a position and no rival bids have emerged.

While Google can’t bid for Yahoo! because of regulatory concerns, it 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.

If Microsoft’s bid for Yahoo! succeeds, it will drastically shake up Australia’s online advertising market, worth about $1 billion a year.

Microsoft and PBL Media are joint venture partners in ninemsn (the Packer group’s PBL owns 25pc of PBL Media). Yahoo! and Seven Media got together to run the Yahoo!7 portal after individual attempts petered out.

 

Also concerned are Fairfax Media and Rupert Murdoch’s News group, which are making their own marks in terms of viewer numbers and ad revenue. The younger market is streaming to MySpace, owned by News, and Facebook
 
However their ability to attract significant advertising revenues remains uncertain.

Microsoft and Yahoo! are way behind Google in Australia, when it comes to search. Google Australia and News’s Truelocal are reported to be making inroads on the Telstra Sensis directories.

 

Google says Microsoft’s bid “raises troubling questions” about whether it would give Microsoft too much power that could be abused ­ drawing attention to Redmond’s past anticompetitive behaviour in the software market.
Microsoft retorts the deal would “create a more competitive marketplace by establishing a compelling competitor for Internet search and online advertising”.

Continuing discussions with Google, which could potentially be a first step to a broader search-ad outsourcing deal, are expected to continue despite Microsoft’s approach, although they disagree on the revenue split.

Citigroup estimates Yahoo! could boost its cash flow more than 25 percent annually by outsourcing all its search advertising to Google.

 

Google has argued in an official blog post that Microsoft could be looking to favour its own and Yahoo! services by pushing customers to other Web services they own, instead of letting customers elect to use rival services.

“Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors’ email, IM, and Web-based services?” asked David Drummond, Google’s chief legal officer