Updated Tuesday, February 5, 2008 0:00 am TWN, AP Google calls proposed MS acquisition ‘troubling’The 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.” Google’s opposition isn’t a surprise, given that Microsoft views Yahoo as a crucial weapon in its battle to gain ground on Google in the Internet’s booming search and advertising markets. Redmond, Washington-based Microsoft has been trying to depict a Yahoo takeover as a boon for both advertisers and consumers because the two companies together would be able to compete against Google more effectively. But Google is painting a starkly different picture, asserting that Microsoft will be able to stifle innovation and leverage its dominating Windows operating system to set up personal computers so consumers are automatically steered to online services, such as e-mail and instant messaging, controlled by the world’s largest software maker. Google’s chief executive, Eric Schmidt also called his counterpart at Yahoo late last week to offer help in frustrating the bid, according to a report on The Wall Street Journal’s Web site Sunday, which cited anonymous people familiar with the matter. The help did not include a counterbid but may have included supporting other counterbids, or guaranteed revenue in exchange for an ad outsourcing agreement with Yahoo, the people said, according the newspaper. AT&T Inc., Time Warner Inc. and News Corp. aren’t planning to bid for Yahoo, the Journal said, citing the people familiar. To help make its point, Google pointed to the way Microsoft previously used Windows to help extend the reach of its Web browser and other applications — a strategy that triggered a U.S. Justice Department lawsuit alleging the software maker illegally used its operating system to stifle competition. The dispute ended with a 2002 settlement that required Microsoft to abandon some of its past practices. “Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?” Drummond wrote. Brad Smith, Microsoft’s general counsel, said preventing Microsoft from buying Yahoo would undermine competition by allowing Google to become even more dominant than it already is on the Internet. “Microsoft is committed to openness, innovation, and the protection of privacy on the Internet,” Smith said. “We believe that the combination of Microsoft and Yahoo! will advance these goals.” If they get together, Microsoft and Yahoo would have about 16 percent of the worldwide Internet search market — still far behind Google’s 62 percent share, according to comScore Media Metrix. But Microsoft and Yahoo already are far bigger in than Google in e-mail and instant messaging, and conceivably would be in a better position to squash rival services if they combined. Illustrating the enormous stakes involved in a deal that could reshape the technology and media industries, Google and Microsoft are already debating the pros and cons before Yahoo has responded to the offer. Yahoo so far has little to say except that its board will carefully examine Microsoft’s bid — a process that “can take quite a bit of time,” according to a message posted on the Sunnyvale-based company’s Web site. | Americas Breaking News Most Read |