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Microsoft purchase of Yahoo draws first challenges

Mon, 02/04/2008 - 7:50am
Brian Santo

Various government agencies are lining up to review Microsoft’s $44.6 billion proposal to buy YahooGoogle, meanwhile, distributed an announcement, the explicit aim of which was to provide lines of questioning for regulators.

The U.S. House Judiciary Committee's antitrust task force has a hearing scheduled for Friday, and the Justice Department signaled an interest in conducting its own review. The European Union, meanwhile, has been extremely strict with Microsoft and will certainly consider its own review.

In what is certain to be a preview of the regulatory inquiries, Google asserted that the open nature of the Internet, which has encouraged continual innovation, could be threatened by the proposed merger.

“Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?,” asked David Drummond, Google’s SVP of corporate development and chief legal officer. “While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies – and then leverage its dominance into new, adjacent markets.”
 
Google is dominant in online advertising. Yahoo’s inability to keep up in that market is one of its biggest problems. Google tried to deflect attention from that issue by noting that the combination of Microsoft and Yahoo would control an overwhelming share of instant messaging (IM) and Web e-mail accounts.

Neither IM nor e-mail is a big revenue generator, but Google prompted regulators to investigate if Microsoft could “take advantage of its PC software monopoly to unfairly limit the ability of consumers to freely access competitors' e-mail, IM, and Web-based services.”

More Broadband Direct:

• Cablevision shrinks VOD window for movies 

• FCC issues new leased access rules 

• Coalition backs NAB mobile study

• Microsoft purchase of Yahoo draws first challenges 

• AOL acquires widget-maker Goowy Media 

• Fourth cable outage in several days occurs in Middle East 

• Broadband Briefs for 2/04/08

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