WASHINGTON — Google Inc. has attacked Microsoft Corp.'s bid to acquire Yahoo Inc. as an effort to extend its software monopoly to the Internet, but Microsoft brushed off the criticism Monday, saying competition would benefit from its proposed deal.
Yahoo, meanwhile, said it has made "absolutely no decisions" about Microsoft's lavish $44.5 billion proposal. The company also said it will explore all options, one of which reportedly could be a partnership with Google.
On Sunday, the war of words between Google and Microsoft escalated after Google executive David Drummond said in a blog post that a Microsoft acquisition of Yahoo could undermine open competition on the Internet.
The post charges that Microsoft "frequently sought to establish proprietary monopolies _ and then leverage its dominance into new, adjacent markets." Microsoft has long been a target of antitrust regulators in the U.S. and Europe.
Drummond, senior vice president and chief legal officer for Google, also asked whether Microsoft could "now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC."
Google shares dipped nearly 4 percent Monday to close at $495.43, while shares of Yahoo rose more than 3 percent to $29.33. Microsoft shares fell slightly to close at $30.19.
Microsoft Chief Executive Steve Ballmer responded Monday that Google is by far the dominant company in the Internet-search business, with as much as a 75 percent share globally.
At a meeting with investors in New York, Ballmer said a Microsoft-Yahoo tie-up would represent the only realistic scenario to inject more competition into the search market.
Ballmer urged Yahoo to quickly accept Microsoft's offer. "Having scale really does help," he said. "We'd have a chance to get farther, sooner with the acquisition of Yahoo."
Yahoo Chief Executive Jerry Yang, for his part, told employees in an e-mail that the company will review the offer "thoughtfully and carefully" and he called Microsoft's bid "one of many options." The e-mail, written on Friday, was made public Monday in an 8-K filing with the Securities and Exchange Commission.
One option might involve Google. According to media reports, Google has suggested the possibility of a partnership with Yahoo that would help the company remain independent.
At the same time, Google is likely trying to draw the attention of regulators with its attack on Microsoft's offer. Antitrust officials are sure to review any acquisition.
Ballmer said Monday he would like to complete a deal before the end of 2008, but that might be hard to pull off in a presidential election year.
Google's criticism also indicates that the search giant views a proposed marriage of Microsoft and Yahoo as a major threat.
Despite its complaints, Google is much larger in the Internet-search market than its nearest competitors. In December, Google controlled a 56.3 percent market share in the U.S., according to the latest report by Nielsen Online.
Yahoo, with 17.7 percent, and Microsoft, with 13.8 percent for its MSN, combined for a market share of 31.5 percent in December, Nielsen's study shows.
Google's share in the global-search market is even larger: Industry analysts and executives say the company accounts as many as three in every four searches conducted worldwide.
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