Google says Microsoft-Yahoo deal poses antitrust issues

SAN FRANCISCO (Reuters) - Google Inc fired back on Sunday at Microsoft Corp's $44.6 billion (22.5 billion pound) bid to acquire Yahoo Inc, accusing Microsoft of seeking to extend its computer software monopoly deeper into the Internet realm.

David Drummond, a Google senior vice president and its chief legal officer, said in a blog post that the combination of Microsoft and Yahoo could undermine competition on the Web and called on policy makers to challenge the combination.

Microsoft was not immediately available to respond to Google's statement.

Drummond argued that Microsoft's power stems from decades- old monopolies in Windows -- the software operating system used to control most personal computers -- and Internet Explorer, which is the dominant browser consumers used to view the Web.

Microsoft's proposed merger with Yahoo would combine the No. 1 and No. 2 suppliers of Web-based e-mail, instant messaging (IM) and portals, which act as starting points for hundreds of millions of users seeking information on the Web.

The Google executive argued that Microsoft could be looking to favour Microsoft and Yahoo services by pushing customers to other Web services they own instead of letting customers elect to use rival services.

"Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' email, IM, and Web-based services?" Drummond wrote in a company blog post at googleblog.blogspot.com/.

In making its case for the deal during a conference call on Friday, Microsoft executives said Google -- not Microsoft -- was the one company antitrust regulators were likely to bar from buying Yahoo, based on Google's dominance in Web search.

Microsoft executives cited industry data showing Google has a 75 percent share of the worldwide Web search market. On a similar basis, Yahoo attracts a 16 percent share and Microsoft around 3 percent of Web searches, Web traffic studies show.