Google must have been caught off guard last week by the Microsoft-Yahoo bid because they are reacting quite rashly and arguably in a way that is not in the best interests of their shareholders...
First, is it wise for Google to be proactively and angrily "kicking the antitrust bee hive" in the U.S. and in Europe when their DoubleClick acquisition is still pending with EU regulators?
- Did it ever occur to Google that they could take the close call in the EU over their pending merger -- that previously was trending in their favor -- and give opponents of the deal in the EU -- more ammunition that this market is too concentrated and that antitrust officials should be more concerned about this market?
- Has Google forgotten that they have 90% search share in Gemany/Spain and 75% share in France/UK?
Second, in leading the charge against Microsoft-Yahoo in Washington, has it occurred to any adult in Mountain View that this will only accelerate Washington interest and attention to adopt the FTC's (5-0) proposed behavioral advertising privacy principles/regulation, which would require opt-in and "affirmative express consent" before Google could use "sensitive data."?
- In other words, is it smart for Google come at this potential merger -- like the equivalent of guns blazing in a metal room -- when Google has a much bigger regulatory vulnerability profile to hit than Microsoft, in that these rules would burden 100% of Google's revenues, but would only affect 5% of Microsoft's revenues?
- It's like they've put a sign on their backs that says "regulate me."
Third, has it ever occurred to Google leaders that they might want to buy another company in the future that requires anti-trust review?
- Cooler heads and adult supervision might have been able get folks to breath deeply and count to ten, rather than throwing the equivalent of a open temper tantrum over the weekend against a deal that may never even get consumated.
- Google has bought over a dozen companies in the last couple of years and clearly would like to buy more in the future.
- Does Google somehow think that attracting lots more antitrust and regulatory attention to Google's dominance of online advertising is somehow in Google's best interests in getting future acquisitions cleared? Especially if we have a Democratic-led Administration which certainly will take a harder antitrust line than the merger-friendly approach of the Bush Administration?
Fourth, does Google think its a good idea to encourage talk and speculation that Yahoo might somehow partner with Google and outsource its 11% search advertising revenue share to Google's 78% share of search advertising?
- Does Google think the prospect of Google "partnering" to gain ~90% share of search advertising revenues would not at least raise an antitrust eyebrow or two?
- Does Google remember the FTC's barely two-month -old admonition in its 4-1 Google-DoubleClick review: "We want to be clear however, that we will closely watch these markets and, should Google engage in unlawful tying or other anti-competitive conduct, the Commission intends to act quickly."
In sum, the Google folks have obviously not thought through the clear implications and ramifications of their actions.
- This is another big rookie Washington mistake for Google, which could haunt them for a long long time...
