Google's Real Goal: Messing with Microsoft

By Steven J. Vaughan-Nichols  |  Posted 2008-02-04

Google's Real Goal: Messing with Microsoft

The shoe's on the other foot. Microsoft has made a multi-billion dollar business from FUDing its competition, now Google is enjoying its chance to see how Microsoft likes the same treatment by objecting to its proposed purchase of Yahoo.

It took Google less than a weekend to respond to Microsoft's offer for Yahoo. By February 3rd, Google senior vice president of development and chief legal officer, David Drummond, had said, "Microsoft's hostile bid for Yahoo raises troubling questions."

Hostile? A bid of $44.6 billion, or $31 a share, a 62 percent premium on Yahoo's share price, which was at a four-year low, is hostile? Wow. Give me a hostile takeover any day then.

Yahoo, in case, you've forgotten was a company in trouble. Heck. Yahoo is a company in trouble. Were I a Yahoo stockholder I'd be overjoyed that someone wants to waste-er, buy-my Yahoo stock for a 62 percent premium.

Besides if Microsoft really did start fighting for control of Yahoo, it would have to contend with a Yahoo poison pill defense. As it is, it looks like Microsoft will have to borrow money to buy Yahoo. If Yahoo pops the pill, it would have to borrow even more billions to pull the deal off.

I'm sure that Microsoft-Microsoft of all companies!-going into multi-billion debt would break Google's heart.

There are also stories floating about that Google might help Yahoo against Microsoft. The only thing I can think about these reports is that it's an attempt to force Microsoft to pay even more for Yahoo.

I mean, come on, there's no way even under George W. Bush that the FTC (Federal Trade Commission) would ever approve of Google buying Yahoo. One analyst even goes so far as to say that Yahoo's shares are actually worth upward of $39 to $45 a share.

Google's Real Goal: Messing with Microsoft

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I'm sorry, this isn't a Back to the Future movie and there's no time-traveling DeLorean. Yahoo's glory days are far behind it. But, if Google, Yahoo and analysts can force Microsoft to pay even more for Yahoo, it will be all the better for Yahoo stock holders and Google won't complain either.

Microsoft also wants this deal to go quickly. Ha! That's not going to happen, and Google will do everything it can to bog down the process. It's not that Google is afraid of Microsoft/Yahoo. What do you get after all when you get two companies that are both on a downward slide and have no real synergy together? Answer: A debt-ridden company going down faster.

But, if Google can slow down that purchase, the really bad times ahead of trying to fit these two companies are likely to go on even longer. After all, Yahoo??í-no fools they-don't use Microsoft software at any for its service, except for Yahoo Music. The rest? It is open source, my friend, the same kind of stuff Google uses. Oh, and what's this, Yahoo is shutting down Yahoo Music. Oh, yes, integrating Yahoo and Microsoft's systems is just going to be a snap.

Google also does make some good points. For example, Drummond wrote that "Microsoft has frequently sought to establish proprietary monopolies-and then leverage its dominance into new, adjacent markets." In particular, Drummond focused on IM and Web-based mail. He's quite right of course. That's classic Microsoft.

I, for one, could easily see a Yahsoft! portal screen that was only readable to visitors using Internet Explorer 7 users. Of course that would be incredibly stupid of Microsoft, but lately Microsoft has been none too bright. Of course, any such proprietary move would play right into Google's hands. This isn't the desktop, it's the Internet. Microsoft doesn't make the rules on the Internet no matter how much they might want to and buying Yahoo isn't going to change that.

As I've said, I think Microsoft needs to buy Yahoo. I also think that Google is going to make that as hard as possible. And, if that includes throwing some FUD its way, well, how does the shoe fit Microsoft? Pinch a bit? Get used to it.

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