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May 19, 2008 3:13 PM PDT

Google execs stew over Microsoft response

Posted by Stephen Shankland
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Google's top brass are meeting Monday to figure out a response to how Microsoft's new overtures toward Yahoo affect Google's potential ad deal with Yahoo.

Google Chief Executive Eric Schmidt, speaking to reporters at a Google Zeitgeist event in the U.K., said he's meeting with co-founders Larry Page and Sergey Brin on the matter, according to the Times Online. "After this press conference the three of us will meet and decide what our response is," Schmidt said.

Google and Yahoo have been discussing a partnership under which Google would supply some text ads alongside Yahoo search results; both companies expressed satisfaction with a limited two-week test. However, an announcement of the partnership between the online rivals has been delayed more than once.

Google's top executives have said they'd like to offer Yahoo a helping hand in their travails to fend off Microsoft, then activist shareholder Carl Icahn, and now Microsoft again. And Brin went one step further, saying he'd give Yahoo CEO Jerry Yang refuge within Google if he's ousted from the Internet pioneer, according to press accounts.

"Jerry is very talented, and if he wants to work at Google, we'd be very excited to have him, but I don't think that's going to happen," Brin said, according to the BBC.

Microsoft attempted to acquire Yahoo but now is considering a more limited acquisition of only part of Yahoo, the company said.

Stephen Shankland covers Google, Yahoo, search, online advertising, portals, digital photography, and related subjects. He joined CNET News in 1998 and since then also has covered servers, supercomputing, open-source software, and science. E-mail Stephen.
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Add a Comment (Log in or register) 14 comments
by JCPayne May 19, 2008 3:41 PM PDT
Well Yahoo-MSN is a monopoly tooo....

Verizon ONLY offers 1) Verizon-Yahoo, 2) Verizon-MSN & 3) AOL over their DSL network at the cheap rate... Allowing 2 of those 3 to merge would be anti-competitive...
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by JCPayne May 19, 2008 3:41 PM PDT
Well Yahoo-MSN is a monopoly tooo....

Verizon ONLY offers 1) Verizon-Yahoo, 2) Verizon-MSN & 3) AOL over their DSL network at the cheap rate. Allowing 2 of those 3 to merge would be anti-competitive.
Reply to this comment
by JCPayne May 19, 2008 3:48 PM PDT
Seriously.... How can google be a monopoly? Anybody can startup an ad network with venture capitol... Building an Operating system on the other hand esp. when Microsoft tells PC makers "You can't work with me if you make PCs with another O.S." is a completely different kettle of fish.

Microsoft calling Google a monopoly is them admitting that no matter what they could never compete against the brains of Yahoo and Google if they team up.
Reply to this comment
by jaspal.m May 20, 2008 12:07 AM PDT
Do you mean everyone can create a new ad netword but its against the law to create new OS and compete with Microsoft.And did u mean that everyone is only allowed to sell pc which is run by window but we are allowed to choose where to do advertising(and we choose only google).
GROW UP!
if you are happy with linux or mac,,,does it mean people who use pc are fools.
You think you can't compete with microsoft because they are monopoly in it,,,and you think you can compete with google?
Google is a new monopoly mogul in Software industry,they got millions of ad customers(people's who advertise through them)so they taking that advantage and providing everything for free,even it is possible that one day they would provide a free OS which would be supported by Advertisement.
Google is a diiferent platform,they can destroy any business models,thats why microsoft really needs to stop google.
There really should be 100's of ad provider which is as big as Google is.
People would buy window just once,but later they would be interact with google for lifetime.
We should not be against any of them,because we made them that big,as we choose their service or their product .If you think they are monopoly then just stop using there service only if it benefit you,otherwise you really look like a fool saying that,microsoft is a monopoly and google is not,or stop using microsoft product and e.t.c...
Goodluck and grow up!
by Mr. Dee May 19, 2008 3:56 PM PDT
Well, somethings gotta give and in this case, I think Yahoo! will drop the Google test for a more palatable Microsoft transaction. It will keep Icahn at bay while at the same time satisfying Microsoft and still keep Yahoo!'s independence nearly intact. Hey at least the Company will make some money at the same time while having financial resources to invest in future vision technologies like Panama that Jerry is always talking about.
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by timster799 May 19, 2008 4:03 PM PDT
Yea, Microsoft does only want part of Yahoo...the profitable part! This story is really old, I can't imagine how its wrecking the brains of the stock holders. Yahoo needs to do what is best for the stock holders, drop the ego.
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by Michael too May 19, 2008 4:12 PM PDT
Well, usually I at the track record of Page and Brin and easily see they have better insights into the business world than I do, but in this case I think their lack of real world experience is misleading them.

They shouldn't worry about this -- they've got more important things to consider. In fact, they should want Microsoft and Yahoo to merge. In mergers like these the efficiency losses are incredible.

The entire day of the announcement, most of the employees at the company will lose a day of work as they sit around gossiping about what it means for them. Over the following weeks, every conversation will spend several minutes discussing the implications as employees are worried about future jobs. Even if there are no layoffs, there will be changes and reductions in responsibility. You only need one VP of whatever, and only one director of something.

As the day of reorganization draws near decisions will start to get delayed. Expenditures will slow down -- there's no reason to approve that project or that expense, we may all be using the Microsoft (Yahoo) platform soon.

Even after the merger takes place there will be 'aftershocks'. There will be a learning curve as folks learn the styles of their new bosses. There will be misfits as some placement decisions end up being bad. These misfits and learning experiences always happen, but if you are creating an entire organization the number of new positions and the potential for problems raises.

And, don't forget the weeks lost to team retreats so that the new teams can learn each other's styles and cultures. And the battles as they determine whose platform is the best for the future.

Microhoo will be lucky if they only miss six months of momentum. Possibly a year will be at risk. Let them merge, and, as they thrash around, Google can leave them in the dust.
Reply to this comment
by AppleSuxLeo May 19, 2008 4:59 PM PDT
Brin may be hitting the vodka bottle after this is over.
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by AppleSuxLeo May 19, 2008 5:08 PM PDT
Make them stew. They have it too easy anyway.
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by AppleSuxLeo May 19, 2008 10:21 PM PDT
YaMicroBook is next...
Reply to this comment
by YankeePoodle May 19, 2008 11:57 PM PDT
Google should worry because its only good (actually great) at search and monetizing it well. But having said that any fall in its search share now, will take away the glamor element around it. Once that is over the google shares will come to earth, and people will see google for what it is, a "one trick pony".
Reply to this comment
by StreetBloggers May 20, 2008 8:09 AM PDT
Google is becoming a giant on it's own, Buying Yahoo would not help them much, Microsoft will destroy yahoo if it does manage to take over. Nothing stops them from completely revamping it into a microsoft play toy. I think Google would be a better match for yahoo in the long run

http://www.googleplexmedia.com
Reply to this comment
by StreetBloggers May 20, 2008 8:11 AM PDT
If you are worried about a monopoly on the internet you are sadly mistaken. With all the freebies what does yahoo have that google or any of the thousands of other search engines and ad companies offer? If you want to fight monopolies fight BIG OIL and Gas prices

http://www.googleplexmedia.com
Reply to this comment
by benjaminstraight July 20, 2008 2:05 PM PDT
Go for a hostile takeover.
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