Microsoft Responds to Google's Missive

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Includes: AABA, GOOG, MSFT
by: Duncan Riley

Microsoft General Counsel Brad Smith has responded to today’s missive from Google on the Microsoft-Yahoo acquisition by highlighting Google’s dominance in search and advertising: 

The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The alternative scenarios only lead to less competition on the Internet.

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.

(That’s the entire response above, emphasis is mine).

The figures used by Smith are accurate and highlight that no matter what Google says about IM and Email, regulators will be more concerned about advertising revenue and competition in the areas that count (search) than email.

The “Microsoft is committed to openness, innovation, and the protection of privacy on the Internet” may cause some people to laugh, but if you take the desktop out of the equation Microsoft has a reasonable track record online in terms of openess and despite its small market share has innovated with some great technology such as Silverlight. Michael said he wasn’t feeling the love towards Google, and he’s not alone.

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