Today, Google's blog posted an entry from David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer. In the post, Mr. Drummond contends that Microsoft probably shouldn't be allowed to buy Yahoo as this would give them too much power over the internet.
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.
Okay, so I believe this is probably true, but it probably shouldn't be the first go-to argument. Last time I checked Goldman Sachs or for that matter any other investment bank is not a corporate sponsor of the Electronic Frontiers Foundation. (I am and encourage you to join too.)
Any argument beyond, "It's a bad business idea," is a bit too sentimental for the business world to care about. I think the following are probably better arguments to put forward:
1. Yahoo is injured and it could be fatal. It hasn't delivered an innovation in a few years and many of its leading applications (mail, photography) have been acquisitions, not inventions. I'm not sure that they have any innovations in it any more.
2. Yahoo's installed base of "users" can, at any moment, run for the doors. Nothing locks them in and they might well flee under new management.
3. The bid is far too high. Yahoo is probably over valued right now and investors are catching on.
4. Yahoo's search engine? I don't think so. Can anyone make an argument that it stands a chance against Google? To tell you the truth, my back-up search engine of choice is A2, not that I get to it much after trying Google.
My view is that Google is best served to stay the heck out of the public spotlight on this one and work private channels instead. By speaking up, particularly when it uses arguments about the public good, might make Google appeared to be frightened about the prospect of Microsoft acquiring Yahoo. If it were me, and I had to put out a soundbyte, I might go with something along the lines of, "Well, to tell you the truth, we're pleased about Microsoft taking on Yahoo. This way, Yahoo will be out of the competitive picture and Microsoft will be too busy trying to digest the acquisition to be an effective competitor for at least five years."