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Microsoft retracts bid to buy out Yahoo and Google makes its move
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After three months of deliberation, Microsoft has withdrawn its bid to purchase Yahoo. Microsoft attempted to purchase Yahoo to increase its own ability to garner online advertisers and improve Internet services.
When Microsoft announced its bid of nearly $45 billion, numerous voices were raised as to the legality of such an acquisition and the possible violation of anti-trust legislation. Loudest among these voices was the technology giant, Google.
Realizing the potential threat such a merger might pose, Google stepped forward, taking action in various ways. The first public action was to raise questions regarding the legality of such a purchase. In the past Microsoft has become notorious for its violation of anti-trust laws worldwide. The possible threat to competition posed by the acquisition of Yahoo by Microsoft is a cause of concern for policy makers around the world.
Google has not limited its actions to the public sphere. Shortly after the bid was made, Google CEO Eric Schmidt contacted Jerry Yang, the CEO of Yahoo. Schmidt offered Yang help in preventing Microsoft from taking over the company, possibly through the creation of a partnership between Google and Yahoo.
Calls were also made to companies on good terms with Google, such as Time Warner. These calls were made to encourage a rival bid against Microsoft and to see what the companies could do to assist Yahoo.
Google’s maneuverings must have been effective – despite raising their price approximately $5 billion, Microsoft was unable to meet Yahoo’s demands.
After being told the price was not high enough, Microsoft’s only option would be to appeal to Yahoo’s shareholders. This would be a long process and Yang made it clear that the time between offers would be used to make Yahoo undesirable to Microsoft, possibly outsourcing or selling many of its online workings to Google. Out of options, Microsoft formally withdrew its bid at the beginning of the month.
Studying the aftermath, it is unclear who has come out ahead. Microsoft has lost the opportunity to improve its online advertisements and Yahoo has not gained anything but attention. If anyone stands to gain from this ordeal, it’s Google.
Coming to Yahoo’s defense, Google had the opportunity to forge the beginnings of a partnership between the two companies. Although no definite agreement has been made, discussion of a future search and advertisement agreements between Yahoo and Google has been initiated. Concerns raised at Microsoft’s bid are now being made over Microsoft’s withdrawal.
A partnership between Google and Yahoo would create a monopoly in Internet searching, giving Google control of nearly 90 percent of all searches.
By partnering with Google, Yahoo could strike a considerable blow to freedom of information. Although Microsoft has withdrawn its bid and Yahoo remains intact, the future of Yahoo could play a decisive role in the future of the Internet.
MARCUS HELEKER
Opinion Writer