Furious at the way Microsoft has lobbied against the Google-DoubleClick deal, Google wastes no time in playing the Redmond Evil Empire card. The rhetoric in Google’s blog post is strong, and the quick reaction suggests that Google will make life as miserable as possible for Microsoft during this process.
That said, the underlying logic is weak. Beyond fear-mongering about Microsoft’s past practices, the only area of actual anti-competitive concern Google can come up with is “email and instant messaging”–and it’s a safe bet that, behind closed doors, Google thinks it can eventually steamroll Yahoo Mail, Outlook, and both companies’ IM platforms. (And AOL still has a big slug of both markets).
Google’s response does illustrate how it will try to frame the debate, however: “The Internet is just an extension of the PC, and monopolistic Microsoft is now trying to control both.” This framing is predictable, but it’s also ludicrous: Microsoft has been trying to “embrace and extend” its PC monopoly to the Internet for 13 years, and it has failed completely.
With Linux, Apple, mobile, video, software as a service, and the rise of cloud computing eating away at the Windows hegemony, moreover, Microsoft’s chances of leveraging its PC monopoly into control of the Internet are now nil. (Especially with Google’s $17 billion of revenue and $150 billion market cap). But no surprise that Google is wasting no time trying to get regulators and consumer advocates agitated.
Microsoft’s hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another. It’s about preserving the underlying principles of the Internet: openness and innovation.
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? Policymakers around the world need to ask these questions — and consumers deserve satisfying answers.
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