Google: Hey, Microsoft--It's Payback Time

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microsoft-yahoo-click.jpg Furious at the way Microsoft has lobbied against the Google-DoubleClick deal, Google wastes no time in playing the Redmond Evil Empire card. The rhetoric in Google's blog post is strong, and the quick reaction suggests that Google will make life as miserable as possible for Microsoft during this process.

That said, the underlying logic is weak. Beyond fear-mongering about Microsoft's past practices, the only area of actual anti-competitive concern Google can come up with is "email and instant messaging"--and it's a safe bet that, behind closed doors, Google thinks it can eventually steamroll Yahoo Mail, Outlook, and both companies' IM platforms. (And AOL still has a big slug of both markets).

Google's response does illustrate how it will try to frame the debate, however: "The Internet is just an extension of the PC, and monopolistic Microsoft is now trying to control both." This framing is predictable, but it's also ludicrous: Microsoft has been trying to "embrace and extend" its PC monopoly to the Internet for 13 years, and it has failed completely.

With Linux, Apple, mobile, video, software as a service, and the rise of cloud computing eating away at the Windows hegemony, moreover, Microsoft's chances of leveraging its PC monopoly into control of the Internet are now nil. (Especially with Google's $17 billion of revenue and $150 billion market cap). But no surprise that Google is wasting no time trying to get regulators and consumer advocates agitated.

Google:
Microsoft's hostile bid for Yahoo! raises troubling questions. 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.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.

Could the acquisition of Yahoo! allow Microsoft -- despite its legacy of serious legal and regulatory offenses -- to extend unfair practices from browsers and operating systems to the Internet? In addition, Microsoft plus Yahoo! equals an overwhelming share of instant messaging and web email accounts. And between them, the two companies operate the two most heavily trafficked portals on the Internet. 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? Policymakers around the world need to ask these questions -- and consumers deserve satisfying answers.



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8 Comments



MSFT said:
"Google's response does illustrate how it will try to frame the debate, however: "The Internet is just an extension of the PC, and monopolistic Microsoft is now trying to control both." This framing is predictable, but it's also ludicrous: Microsoft has been trying to "embrace and extend" its PC monopoly to the Internet for 13 years, and it has failed completely. "

They have failed completely????
According to:
http://www.w3schools.com/browsers/browsers_stats.asp

IE5, IE6, and IE7 have a combined market share of 54.4% as of Feb of 2008, to Firefox' 36.5%.

IE does NOT conform to the W3C standards, yet since they have over 50% of the market share how many major websites can you think of that will dare to conform to the W3C standards and may possibly make their site un-viewable in IE?

Any major corporation, or website that want's to have a large market will tailor their site to IE. (unless they are specific sites for Firefox\Unix)

MS just recently got OOXML approved as an ISO standard.

So, they have pretty much kept a wrap on the browser wars since taking out Netscape. They have the vast majority of websites conform to their version of HTML, (even those that use php strive to optomize it for IE.) They have now forced their standard of XML on the world.

So, how has their 13 year attempt at monopolizing the internet been a complete failure? Looks to me like they have conquered everything except the search engine.



yo buddy said:
Leo Stoch you dumb.

MSFT and YHOO's search biznatches are valued at a small fraction of goog's. you cant really look at market cap since these companies have many different biznatches while goog basically has one.


Still Inside said:
Please, please, please everybody remember this for when Google has their first showdown with the antitrust nazis (they are already getting looked at in Europe). Please, please, nobody dare feel sorry for them.

I thought they dropped the whine-to-the-government strategy two years ago when they figured out that MSFT didn't have a freaken clue about the Internet and they could beat them the old fashioned way with their eyes closed. Two years has gone by and MSFT and YHOO are both nowhere and anybody with an understanding of this business knows that 0+0=0. There's no benefit in economies of scale when your product is free. YHOO and MSFT are going to just be one big loser instead of two little ones.

This merger is no threat to GOOG, but they are acting like a bunch of pussies and digging their own grave at the same time.


SI

Leo B Stotch said:
John Wayne said:
"Google is nothing more than a search engine with a history of slightly better results than its competitors, yet its competitors are valued roughly 95% less!?!?!? This is f-ing insane."
_____________________________

valued roughly 95% less??? than YHOO and MSFT??? maybe, based erroneously upon share price alone, but hey einstein, ever heard of market cap??? it's the market value of a company, which is figured by multiplying the share price and the total shares outstanding....therefore, since YHOO and MSFT have more shares out, their "95% lower" stock price doesn't automatically mean that GOOG is worth about 20x as much. instead, each share of MSFT and YHOO represents a smaller piece of the companies' "pie" when compared to what each share of GOOG represents. anyway...

market caps:
YHOO = 39.6B
GOOG = 161.4B
MSFT = 283.4B

you see, GOOG is valued at about 4x as much as yahoo, but just over half of what MSFT is. next time, have even the slightest clue before you waste peoples' time because you typed something stupid.

John Wayne said:
This is gettin' to be ri-god-damn-diculous!!! Google is nothing more than a search engine with a history of slightly better results than its competitors, yet its competitors are valued roughly 95% less!?!?!? This is f-ing insane. It's time. Hey Yahoo, Panama JUST got started and things are slowly but surely improving. Don't bail out yet. See this thing through. Market the hell out of it, and see what happens. It's entirely possible that this time next year, given the right marketing efforts, Yahoo could be back in the search game with a very competitive presence.

Give Me a Break said:
When was the last time any competitor of Google won a significant distribution deal without going completely underwater on the financials (ie Facebook)? Google may not be predatory, but there simply is no competition in search, because no one but Google can afford to be out there. Then people praise Google because they don't do traditional advertising. Why would they ever need to if they can have a search box on (nearly) every site on the Internet? The fact is, neither Microsoft nor Yahoo can compete with Google on their own. With the move to Web services, which will be monetized through advertising, that leaves Microsoft nearly defenseless. That necessitates this deal...and frankly, makes the DoubleClick argument a not-so-bad one.

To play into the brand legacy of Microsoft's anti-competitive practices to drum (drummond?) up support against the deal is just par for the course for Google. They are the new Microsoft.

Meet the new boss...

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