Pot, kettle, black: Google fires back at Microsoft

In what can only be described as classic Silicon Valley FUD, top Google lawyer and proxy for the executive board David Drummond characterizes Microsoft’s bid for Yahoo! as ‘troubling:’

Microsoft’s hostile bid for Yahoo! raises troubling questions. 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.

Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC? While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies — and then leverage its dominance into new, adjacent markets.

As might be expected, pundits have plenty to say about this. Ina Fried gets it right for me when she makes the pot, kettle, black reference. If Google’s ‘Do no evil’ mantra meant something in the past, it sure as heck is pretty much meaningless today. Ask a Google engineer to give you a rough idea what they’re working upon and the answer is likely to be: “It’s a secret.” So much for openness.

Mike Arrington sums up the position Google now finds itself in when he says:

But 2008 may be the year Google can no longer hide behind the “David v. Goliath” defense with Microsoft. Google is the reason that Yahoo has stumbled so badly, and may be Microsoft’s last hope to be a meaningful player on the Internet over the long run. To put it bluntly, the roles are reversed. Google is now the Goliath, and they’re public whimpering on the acquisition makes them look petty and scared.

MaryJo Foley has a slightly different take when she asks:

The monopolist slug fest officially has begun. Desktop-operating-system monopolist vs. online-advertising monopolist. Or maybe monopolist of tech worlds past vs. monopolist of tech worlds future?

Truth be known, Google has had a pretty easy ride of things the last few years as its revenue and earnings rocketed skywards. It is only now, when it has seen its stock take a pounding following an earnings miss that Google is having to react. Only it’s picked the wrong fight. Attempting to catch the regulator’s eye with such an obviously hypocritical position won’t work. If anything, it is likely to bring Google unwelcome attention as the numbers come under scrutiny.

Microsoft wasn’t going to give Google a pass on their statement. Brad Smith, Microsoft’s general counsel returned fire with:

Today, Google is the dominant search engine and advertising company on the Web. Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65 percent search query share in the U.S. and more than 85 percent in Europe. Microsoft and Yahoo! on the other hand have roughly 30 percent combined in the U.S. and approximately 10 percent combined in Europe.

Microsoft is committed to openness, innovation, and the protection of privacy on the Internet. We believe that the combination of Microsoft and Yahoo! will advance these goals.

He’s right. And before anyone screams ‘liar’ about his ‘openness’ gesture, it’s worth noting that outside of the Windows franchise, Microsoft has been remarkably open.

This story is going to run and run but regardless of the posturing, Microsoft looks set to win this one. It’s been in the planning for a very long time, the bid timing was near perfect even if many think the outcome could be a disaster. Clearly Google is not in that latter camp. It’s running scared at a time when it can least afford.

ENDNOTE: for an entertaining view of the Microsoft-Yahoo merger, check Zoli’s round up of metaphors. Or Kara Swisher’s interpretation of Steve Ballmer’s letter to the Yaho! Board.