David Drummond, Senior Vice President, Corporate Development and Cheif Legal Officer at Google is concerned about the potential acquisition of Yahoo! by Microsoft. Drummond posted to the Official Google Blog some questions that are troubling him and that don’t yet have answers.

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?


“It’s about preserving the underlying principles of the Internet: openness and innovation,” says Drummond, which is a pretty amusing comment coming from a company that essentially controls search on the Internet.

Is Google just pretending to care about this transaction? Clearly, Google is one of the biggest innovators of the Internet today and should have no problem staying on top of Microsoft/Yahoo… unless Microsoft plays unfairly. But the U.S. government has extended until at least November 2009 its oversight of Microsoft’s previous bad behavior. Is Microsoft really so dumb and do they really lack the foresight to abuse a monopoly right in front of the regulators eyes?

I think Google’s comments are just a sign that they are starting to feel threatened. As Drummond said, Microsoft and Yahoo portals are highly trafficked and if played right could threaten Google’s hold on the advertising and search markets. But Microsoft and Yahoo are no longer innovators, they are followers. Google might have to work a little harder to keep ahead of the game, but I don’t doubt that they have the brain power to do it.

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