Internet shattering announcement of Microsoft’s $45 billion bid for Yahoo! has the whole world buzzing about consequences and repercussions. News sites and blogs that are remotely related to technology, economics, business or startups are all talking about the bid that would define 2008. The technology world as a whole was shaken not stirred by the outlandish bid. It is natural that Google feels threatened by such activity. But the recent post on Official Google Blog makes the search engine giant looks weak and scared.

So 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.

I agree with Google that if Microsoft were to take over Yahoo! that would severely stifle innovation and competitiveness. Not only would Yahoo! lose credibility but users of the decade old internet portal would be disappointed and might jump ship to its competitors. But how exactly would it hurt Google’s interests? As far as I could tell Yahoo! has been one of Google’s toughest competitors.

Google asks Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? Doesn’t this eerily sound familiar to Google’s search engine dominance. Approximately 60% of total web searches are not happening on Google servers. Both Yahoo! and Microsoft are trailing way behind the big G and if this trend continues Google will rule the internet in the next few years. Google also goes on to say … 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?

I would hate to see Yahoo! buckle under pressure and slip into the hands of Microsoft. But Google is trying to relate the Microsoft-Yahoo! alliance to the end of the open-internet culture. That is something I refuse to believe. Google should reconsider its stance on the alliance of its competitors and give them more respect. In the words of TechCrunch when [Google] complain about the formation of a new entity that can provide them real competition in the search and online advertising space, I’m not feeling the love.

Microsoft’s Reaction

The response from Microsoft about the scared Google speech was short and sweet. Not going into too much detail MS makes it clear how a combined MS-Yahoo! team can challenge the might Google. In their words The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The alternative scenarios only lead to less competition on the Internet.

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