Be Afraid, Be Very Afraid, Google Says

While Yahoo formulates a defense against Microsoft's hostile $44.6billion bid, Google is showing much love and support to Yahoo -- acompany it generally regards as a competitor. Google's turnaboutsuggests the seriousness of the threat Microsoft poses, and may givethe lie to Google's claims that a Microsoft-Yahoo combination would beanticompetitive.

Google CEO Eric Schmidthas reportedly been on the horn with Yahoo CEO Jerry Yang, trying toiron out some sort of deal under which Yahoo will outsource its searchbusiness to Google.

In the meantime, Google's chief legal officer David Drummond is blogging about the threat a merged Microsoft-Yahoo would pose to life, liberty and the pursuit of Also check out : .

"There are lots of levels of irony here," says Joseph Turow, aprofessor at the Annenberg School for Communication at University ofPennsylvania.

Google's interest is hardly altruistic -- it's more likely a form of retaliation against Microsoft for raising objections to its acquisition of DoubleClick.

The bickering between Microsoft and Google has gotten ugly,culminating with Drummond's characterization of Microsoft's businesspractices as "inappropriate and illegal." (And if you're keeping count,Drummond used the word "openness" three times in his blog post, while Microsoft used the word once in its response.)

"The key thing to look at in antitrust matters is to see who iscomplaining," says Stan Leibowitz, an economics professor at theUniversity of Texas at Dallas. "If consumers are complaining, there's agood chance [that the deal] will reduce competition. And if theso-called competitors are complaining, chances are good that [the deal]will increase competition. The fact that Google's against [Microsoft,]and it's the market leader, it would indicate, almost by its action,that the market's going to be more competitive."

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