Microsoft's Yahoo bid + Google Proposition

Microsoft's Yahoo bid + Google Proposition. A Microsoft-Yahoo merger could threaten the openness on which the Internet is based, according to a Google executive. Microsoft has put a cash and shares bid on the table for Yahoo!, which values it $44.6bn. With Google being the leader of internet companies right now, clearly Microsoft thinks that acquiring Yahoo! would bolster their position.

Microsoft's US$44.6 billion "hostile" bid "raises troubling questions," said David Drummond, Google chief legal officer, in a blog post on Sunday.

Microsoft and Yahoo together have a large share of the e-mail and instant messaging accounts, as well as two of the most popular Web portals. Drummond wondered about the possibility that Microsoft could use its dominance in the PC software market to unfairly limit access to competitors' Web services.

Intent on upsetting Microsoft's offer for Yahoo, Google's chief executive Eric Schmidt made a personal phone call to Yahoo's founder, Jerry Yang, to propose working together.

Yahoo has not publicly responded to Google's approach, which was leaked to the American media, and is yet to outline its position in response to Microsoft's takeover offer.

The emergence of an alternative bidder remains a possibility. Time Warner, AT&T and Comcast are all viewed as possible entrants to the battle. Rupert Murdoch's News Corporation, however, has said it is not preparing a bid.

In a message to "fellow yahoos", Yang has circulated an email to staff saying that "absolutely no decisions have been made" about the company's response to Microsoft's offer.

"This proposal is just that - a proposal," wrote Yang. "You can be sure the board is going to review it thoughtfully and carefully, and do what's right for our great company."

About Microsoft's Yahoo bid, Yahoo said on Saturday that it is evaluating the unsolicited bid.