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Google concerned over Yahoo deal

Nancy Marshall-Genzer Feb 4, 2008

TEXT OF STORY

Scott Jagow: Microsoft built its empire on the PC. Google, on the web. But Microsoft is trying to storm the gates of the Internet. Its $44 billion hostile takeover bid for Yahoo makes that clear.

Google is very concerned. Over the weekend, Google executives called Yahoo to offer their help in fending off Microsoft. And they called other companies to talk about making a rival bid for Yahoo. More now from Nancy Marshall Genzer.


Nancy Marshall Genzer: Yahoo hasn’t said much, except that its board will examine Microsoft’s bid carefully. Google’s top lawyer is quoted on its web site as saying the acquisition of Yahoo could give Microsoft illegal control over the Internet.

Jupiter Research analyst Michael Gartenberg says Google has reason to worry:

Michael Gartenberg: But if you’re Google, you may have some concerns because we’re now going to be facing a very strong number two competitor that can compete in all of our core areas.

But Gertenberg says even if Microsoft gets Yahoo to agree to a merger, it’ll still face a lot of hurdles. Some members of Congress have already said they’d examine any merger closely. The House Judiciary Committee will look at the proposed deal at a hearing this Friday.

Regulators in Europe are also concerned. But for now, Microsoft is concentrating on Yahoo shareholders, hoping to convince them the offer is too good to pass up.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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