Google's Page rips Microsoft, says Yahoo ad deal OK

Google billionaire co-founder Larry Page criticized a potential Microsoft takeover of Yahoo, saying it would concentrate too much power in the online communications market, stifling innovation and curbing competition.

But he discounted the idea that an advertising deal between Google and Yahoo — one the two companies are now exploring — would present any potential antitrust problems.

In his first official trip for Google to the nation's capital, Page spoke at a forum sponsored by the New American Foundation think tank about expanding affordable access to high-speed Internet service and opening up cellular networks to more applications, services and devices.

The territory was friendly as Google Chief Executive Eric Schmidt was recently elected chairman of the think tank, which counts telecommunications and technology policy in its varied body of work. Schmidt, a board member since 1999, was not at the talk.

Page said a successful Microsoft-Yahoo deal would "close a lot of things that are really important ... like instant messaging" and also Web-based e-mail communications.

"Now, if you put 90% of communications all in one company ... that's really a big risk, especially one (Microsoft) that has a history of doing bad stuff," he said. "So if you want to have good products you need to have some degree of openness."

However, ComScore Inc. earlier this year provided data that showed a combined Microsoft-Yahoo company would have about a 70% e-mail and instant messaging market share in the United States and a 77% market share worldwide. ComScore figures were from December.

Court oversight of Microsoft's market power began in 2002 after an antitrust settlement was reached among Microsoft, the federal government and 17 states, barring the software maker from seeking deals with computer makers to exclude rival software. It was intended to also keep the company from using its operating system monopoly to hinder competition in other products. Microsoft also faces scrutiny in the European Union, where regulators have opened two antitrust probes.

Page also talked up Google's push to use fallow TV airwaves, or so-called white spaces, for affordable broadband service and other similar initiatives. He said Google is participating in a government spectrum auction to open up cellular networks to more devices, applications and services.

Google had bid $4.6 billion for a swath of spectrum in an effort to impose provisions allowing any device or service to work on a resulting network, but lost out to the eventual winner, Verizon Communications.

Google strongly supports such initiatives, he said, because it would increase competition, spur better innovative products and provide more Internet access, generating greater revenue for the Mountain View, Calif.-based company.

In the case of Microsoft, the software maker had sought to buy Yahoo for $47.5 billion as a way to counter Google's dominance in the search and advertising market, but recently broke off talks.

Google and Yahoo are exploring a long-term alliance to show Google ads alongside Yahoo search results after a two-week trial last month showed Google's technology could help boost Yahoo's profits.

While Page said Google has a large advertising share, "there are ways in which to structure a deal with Yahoo that will be reasonable ... especially given the alternatives they have, which aren't great either."

Antitrust obstacles can't be ruled out, as the two companies control more than 80% of the U.S. search advertising market. Several analysts have said a Google-Yahoo partnership will face regulatory scrutiny — intense enough to be deal-breaking.

Microsoft spokesman Jack Evans referred The Associated Press to a comment that the company's general counsel, Brad Smith, made last month regarding a Google-Yahoo agreement. He said then it "would make the market far less competitive, in sharp contrast to our own proposal to acquire Yahoo."

ComScore said recent data for April shows that Google has increased its share of the online search market, snaring nearly 62% of searches performed in the United States. Yahoo's share for the month was 20%, while Microsoft captured about 9%, both declines for those companies.

Google spokesman Adam Kovacevich said that Page met with Federal Communications Commission Chairman Kevin Martin and Commissioner Michael Copps and Reps. Ed Markey, D-Mass., John Dingell, D-Mich., and Cliff Stearns, R-Fla., regarding the white spaces issue.