Internet giant Google said yesterday that it finds 'troubling' a multi-billion-dollar bid to acquire its rival Yahoo by computer giant Microsoft and urged regulators to tightly vet the proposed deal.
'Microsoft's hostile bid for Yahoo raises troubling questions,' said a statement by David Drummond, Google's senior vice president for corporate development and chief legal officer.
'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,' he added.
Microsoft announced on Friday that it is courting California-based Yahoo with a $44.6 billion offer.
Drummond accused Microsoft of using its competitive advantage in the personal computer market to gain 'inappropriate and illegal influence over the Internet' and said it was likely to try to do the same if it acquires Yahoo.
He accused the company of 'legacy of serious legal and regulatory offences.' EU competition regulators have launched a series of probes against Microsoft, accusing it of abusing its dominant market power.
Microsoft lawyer Brad Smith argued that the merger would create healthy competition for Google. It 'will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising,' he said in a statement posted on Microsoft's website.
Although Microsoft is the dominant force in personal computer operating software, a tie-up with Yahoo could help it reposition itself amid a changing tech landscape with more applications moving online, anaylsts say.
The US congressional House Judiciary Committee's Antitrust and Competitive Policy task force has said it will give the proposed Microsoft-Yahoo merger 'careful examination'.
'Microsoft's bid ... is certainly one of the largest technology mergers we've seen and presents important issues regarding the competitive landscape of the Internet,' the panel's top two members, Chairman John Conyers and vice chairman Lamar Smith said in a statement.
'We believe that the interests of Internet users come first - and should come first - as the merits of this proposed acquisition are examined and alternatives explored,' the Google statement said.
Yahoo would give Microsoft a search engine to compete with Google's; a popular web portal for email, shopping and news, as well as one of the most recognized online brands.
Yahoo is losing ground rapidly in the Internet arena to Google, a search leader which has cashed in on the market for online advertising.
Yahoo has yet to say whether it will accept the offer, but analysts have said it is too good for the struggling Internet veteran to refuse and that US regulators are unlikely to find grounds to stop it.
