The ongoing Yahoo-Microsoft now has a new player – Google CEO Eric Schmidt. The top executive from Microsoft's bitterest rival has waded into the debate about Microsoft's pursuit of Yahoo, saying the world would be ''better off'' if the group were to remain independent.
Speaking to reporters at the annual Allen & Co media conference in Sun Valley on Thursday, Schmidt said, ''The world is better off with an independent Yahoo. There's more competition ... in search, and more competition in the other advertising markets where Yahoo is a leader.''
He alleged the Microsoft bid for Yahoo was bad for competition. ''The moment we saw the offer from Microsoft we saw it as anti-competitive,'' he said. In an apparent reference to past regulatory investigations of Microsoft, he added: ''It's easy to understand … just look at their history.''
Not surprisingly, Microsoft had made similar noises during Google's recent advertising tie-up with Google, citing the deal will ''increase prices for advertisers and start to consolidate more than 90 per cent of the search advertising market in Google's hands'' (See: Microsoft opposes Yahoo-Google deal, reveals another rejected stake plus search offer)
In fact, the deal is currently being investigated by regulators on competition concerns. But Schmidt said the deal was not anti-competitive. ''It took a long time to come up with a deal that was reasonable for both parties that in our judgment would get through on anti-trust.''
Criticizing Microsoft's advances on Yahoo, Schmidt said, "Microsoft has a long history of having deals that look quite good and end up looking not so good when you read the fine print."
At the Sun Valley conference, Yahoo executives have been seen huddled together with Larry Page and Sergey Brin, the co-founders of Google. Sue Decker, Yahoo's president, spent about an hour with the pair on Wednesday night in the bar of the Sun Valley Inn while Jerry Yang, Yahoo's chief executive met the duo after lunch on Thursday.
However, he was not quite accommodating towards Microsoft executives and said that he unlikely to confer with them during the conference.
Microsoft made an unsolicited offer to buy Yahoo worth $33 a share in early May but the deal was rejected as too low by Yang. Yahoo shares closed yesterday at $23.50.
Since then Yahoo shares have slumped, prompting billionaire investor Carl Icahn to agitate for a change in board personnel to force the resumption of talks with Microsoft. Icahn owns about four per cent of Yahoo and has been trying to assemble an alternative board slate to replace the existing one.