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Google's Bid to Save a Rival?

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A very interesting dispute with antitrust implications is playing out between Microsoft and Google.  Last week, Microsoft offered to buy Yahoo for $44.6 billion in cash and shares (NYT).  Given Microsoft's size and past behavior, the deal raises serious antitrust issues.  Preventing the monopolization of online search and advertising services is a key concern (WSJ).  Not surprisingly, Internet giant Google is opposed to the merger and has publicly denounced it.  David Drummond, Google's senior vice president and chief legal officer stated on his blog "While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets.”   Today, the WSJ and NYT report that Google is prepared to go farther.  Apparently, Google is considering ways in which it may actively squelch the deal by helping others outbid Microsoft or Yahoo to remain independent. 

Even though a Google purchase of Yahoo is clearly off the table for the same antitrust reasons that may impact Microsoft, one wonders whether the above interference is any less troublesome.  At some level, Google is surely concerned about the competition from a Microsoft-owned Yahoo.  Could active interference with the merger be viewed by regulators as an attempt to maintain Google's industry dominance?  

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Dan Cahoy is Associate Professor of Business Law at Penn State's Smeal College of Business. He is also a registered patent attorney. For more information, take a look at Dan's CV Web bio  or Research Page.

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