Microsoft anti Google-Yahoo deal
2008-06-14 14:33
Washington - Microsoft Corp sought on Friday to enlist support for its opposition to a new advertising collaboration deal between Google Inc and Yahoo Inc, two sources familiar with the matter told Reuters.
One day after the companies announced an agreement allowing
Google to sell search ads on Yahoo's website, Microsoft
contacted advocacy groups that work to influence policy in
Washington.
According to one source who was contacted by Microsoft, the
software company said in an e-mail that the Google-Yahoo
agreement would "limit choices for advertisers and publishers"
and "destroy a competitive alternative".
Specifically, Microsoft takes the view that the deal is
akin to a price-fixing agreement, with Google and Yahoo
effectively setting a minimum price for advertisements on some
key word searches, according to another source familiar with
Microsoft's thinking.
"The effect of that is sitting down and agreeing, 'We won't
go below (the minimum price)'," this source said. Microsoft
also believes the arrangement will lead to the demise of
Yahoo's own search advertising business, eliminating a
competitor, he said.
Less competitive
Microsoft spokesperson Jack Evans on Friday reiterated
Microsoft's overall objections to any Google-Yahoo deal, saying
it would make the internet advertising market less
competitive.
"Our position has been clear since April that any deal
between these two companies will increase prices for
advertisers and start to consolidate more than 90 percent of
the search advertising market in Google's hands," Evans said.
Microsoft later said in statement its lobbying approach
"reflects our belief that we have a responsibility to engage
with policymakers on issues that impact our products,
customers, shareholders and the industry overall ..."
It would be something of a role reversal for Microsoft if
the company also decides to press the US Justice Department
to file an antitrust lawsuit. Microsoft spent years fighting an
antitrust lawsuit by the department alleging that it abused its
Windows monopoly. It settled the case in 2002 and agreed to
restrictions on its business practices.