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Google launches drive to torpedo Microsoft's $44 bn bid for Yahoo

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  • Standing between a marriage of Microsoft and Yahoo may be the technology behemoth that has continually outsmarted them — Google. In an unusually aggressive effort to prevent Microsoft from moving forward with its $44.6 billion hostile bid for Yahoo, Google emerged over the weekend with plans to play the role of spoiler.

    Publicly, Google came out against the deal, contending in a statement that the pairing, proposed by Microsoft on Friday in the form of a hostile offer, would pose threats to competition that needed to be examined by policy makers. Privately, Google, seeing the potential deal as a direct attack, went much further. Chief executive Eric E Schmidt placed a call to Yahoo chief Jerry Yang offering the company’s help in fending off Microsoft, possibly in the form of a partnership between the companies, people briefed on the call said.

    Google’s lobbyists in Washington have begun plotting how it might present a case against the transaction to lawmakers. Google could benefit by simply prolonging a regulatory review until the next US president takes office. Several Google executives made “back-channel” calls over the weekend to allies at companies like Time Warner, which owns AOL, to inquire whether they planned to pursue a rival offer and how they could assist. Google owns 5 per cent of AOL.

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    Despite Google’s efforts and the work of Yahoo’s own bankers over the weekend to garner interest in a bid to rival Microsoft’s, one did not seem likely, at least at this early stage. For example, a spokesman for News Corporation said on Sunday night that it was not preparing a bid, and other frequently named prospective suitors like Time Warner, AT&T and Comcast have not begun work on offers, people close to them said. They suggested that they did not want to enter a bidding war with Microsoft, which could easily top their offers.

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