Microsoft's Role In GOOG-YHOO Delay: Outlobbying
This story was written by Staci D. Kramer.
So how did Google (NSDQ: GOOG) move from promising to start its deal with Yahoo with or without the regulators to postponing it all within a matter of weeks? Chief among other factors, Microsoft (NSDQ: MSFT) played the DC chess match more deftly, applying its expensive tutoring to startingand stayinga few moves ahead of Google and Yahoo (NSDQ: YHOO). One excellent illustration from the NYT's look at the lobbying that has Google on the defensive: Microsoft launched its protest site July 15, while Google waited more than three months after announcing the deal to put up its own explanation.
Another example underscores Google's traditional public self-confidence and how that can chafe the folks with power in Washington. Schmidt promised reporters on Sept. 17 that the partnership would kick in this month with or without Justice approval, while admitting they hadn't explained it well enough. But a tech lobbyist tells the Times: "I watched that with some amusement because policy makers don't like to be told that they're irrelevant, and what that announcement amounted to was they were told they are irrelevant. ... Well, they just found out how relevant policy makers are."
Meanwhile, Microsoft spent the intervening months lobbying everyoneregulators, other lobbyists, anyone who might be willing to raise a doubt about the anti-competitive possibilities. In the process, they drew some supportor at least, some doubt-raisingfrom some of those who gave the Redmond company grief over anti-trust issues. Ed Mierzwinski, program director, United States Public Interest Research Group: "I don't agree with Microsoft on very much [but] there's no question that there are some serious competition questions."
Google both blames Microsoft for working "hard from behind the scenes to generate much of the opposition to this deal" and tries to dismiss it. And Microsoft doesn't want credit for this one, with a spokesman telling the Times: "There's an old rule in debate: if you're not winning on substance, talk about the process."
By Staci D. Kramer