Google seeks to scuttle Microsoft bid for Yahoo

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New York, Feb.4 : Technology behemoth Google is reportedly planning to scuttle Microsoft's plans to buy out Yahoo.

According to the New York Times, Google mounted an unusually aggressive effort to prevent Microsoft from moving forward with its 44.6 billion dollar hostile bid for Yahoo.

Google publicly came out against the deal, contending in a statement that the pairing, proposed by Microsoft on Friday in the form of a hostile offer, would pose threats to competition that need to be examined by policy makers around the world.

Privately, Google, seeing the potential deal as a direct attack, went much further. Its chief executive, Eric E. Schmidt, placed a call to Yahoo's chief, Jerry Yang, offering the company's help in fending off Microsoft, possibly in the form of a partnership between the companies, people briefed on the call said.

Google's lobbyists in Washington have also begun plotting how it might present a case against the transaction to lawmakers, people briefed on the company's plans said. Google could benefit by simply prolonging a regulatory review until after the next president takes office.

In addition, several Google executives made "back-channel" calls over the weekend to allies at companies like Time Warner, which owns AOL, to inquire whether they planned to pursue a rival offer and how they could assist, these people said. Google owns five percent of AOL.

People close to Yahoo said that the company received a flurry of inquires over the weekend from potential suitors.

One person involved in Yahoo's deliberations suggested that "the sum of the parts are worth more than the whole."

In making its bid for Yahoo, Microsoft is betting that past antitrust rulings against it for abusing its monopoly power in personal computer software will not restrain its hand in an Internet deal.

In the United States, a federal district court in Washington ruled in 2001 that Microsoft had repeatedly violated the law by stifling the threat to its monopoly position posed by Netscape, which popularized the Web browser. The suit, brought during the Clinton administration, was settled by the Bush administration. But as a result of a consent decree extending through 2009, a federal court and a three-member team of technical experts monitors Microsoft's behavior.

Google's effort to derail or delay the deal on antitrust grounds mirrors Microsoft's own actions with respect to Google's bid for the online advertising specialist DoubleClick for 3.1 billion dollars, announced in April.

Yahoo has not made a public statement about the proposed deal since Friday, when it said it was weighing Microsoft's offer as well as alternatives and would "pursue the best course of action to maximize long-term value for shareholders."

Yahoo and Microsoft declined to comment on Sunday.

ANI

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