Microsoft: "no" to Yahoo/Google deal, "yes" to Yahoo/Microsoft acquisition?

Political Manipulation Returns

THE Yahoo-Google-Microsoft saga has a lot to teach us about intervention and manipulation at levels as high up as the government, so we have been keeping track of it [1, 2, 3, 4, 5, 6, 7]. In this latest summary, we bring together events gathered throughout the past week. The intention is to show what tricks Microsoft in particular has been up to.

As shown before (see links further up at the top), Microsoft has been working very hard to intercept a sensible deal between Yahoo and Google. Such a deal would be a 'posion pill' that deters against another hostile takeover bid from Microsoft.

Now far did Microsoft go? Well, it was never shy about AstroTurfing, but that's 'small potatoes' in comparison to the control Microsoft exerts at government level, and not just in the United States by the way. From the new guy at the Seattle Times (Todd Bishop jumped ship):

In an article Tuesday, Roll Call quoted a "knowledgeable tech industry source" as saying:

"Microsoft is pulling out every favor it's got ... It has a very close relationship with DOJ and the White House, and all of that pressure is being brought to bear."

It is no secret that Microsoft has 'planted' some of its own cronies in various influential places. In many spots among our 4,000+ posts we have provided and shown concrete examples. Regarding the DOJ (US Department of Justice) which is mentioned above, we have covered some examples here.

Wired has this short post about what it calls "The Lobbying Wars" between Google and Microsoft.

Google may have Microsoft beat in the search innovation game, but Microsoft has more practice in lobbying Congress and knows how the throw its weight around in Washington. Microsoft has been hard at work trying to thwart Google's proposed search partnership with Yahoo, and it looks as though their experience in DC is coming in handy.

Glenn Manishin, a partner in Duane Morris’ antitrust and technology practice, tells Roll Call today that Microsoft isn't so much trying to protect its search business as it is looking to create roadblocks to Google's growth:

“Microsoft’s opposition has very little to do with online advertising and is part of a broader, longer-term strategic battle between two visions of where technology is going to be... I think Microsoft’s concern isn’t directly with the competitive effect of online advertising, because Microsoft doesn’t do a lot of online advertising.”

When it comes to lobbying and political brunt, Microsoft has more maturation/maturity (state) while Google is still maturing (process) because Washington has already appointed people who are in Microsoft's pocket. Google is therefore in a position of disadvantage in such a corruptible environment. As the post above rightly states, "Microsoft isn't so much trying to protect its search business as it is looking to create roadblocks to Google's growth."

According to this report from The Register, Google fights fire with fire. It's just lobbying.

Google is holding secret negotiations with the US Department of Justice to head off a full investigation into its ad-sharing deal with Yahoo!.

In a state such as this ("secret negotiations with the US Department of Justice"), no wonder the whole system is collapsing under the weight of long-charged corruption.

“Did you know that there are more than 34,750 registered lobbyists in Washington, D.C., for just 435 representatives and 100 senators? That's 64 lobbyists for each congressperson.”

--CIO.com

This is not sustainable.

Microsoft Tortures Yahoo!

Some days ago, a Microsoft investor pressured the company to sell out to Microsoft. It caused great harm.

The shares haven't dipped below $12 since the summer of 2003.

This pressure was bound to have no real effect, according to IDG.

A relatively small Yahoo shareholder is proposing a new Microsoft takeover offer, but analysts don't think it's enough to entice the companies back to the negotiating table.

On Thursday, Mithras Capital, a California investor and Yahoo shareholder, issued a statement proposing that Microsoft buy Yahoo at US$22 per share, $11 less per share than Microsoft's last offer for the entire company, but still a premium over the current price.

Several days later came Microsoft's CEO playing those old pursuit games with Yahoo! (yes, again).

Microsoft Corp. Chief Executive Officer Steve Ballmer said a deal with Yahoo! Inc. may still make economic sense for shareholders of both companies, pushing Yahoo stock up as much as 17 percent.

[...]

Yahoo spokeswoman Tracy Schmaler didn't immediately return calls seeking about Ballmer's remarks today. Microsoft spokesman Frank Shaw had no immediate comment.

Apparently, regulators won't allow Yahoo to sign an innocent deal with Google, but for an abusive monopolist to buy a competitor in order to destroy another is absolutely fine. It's all just a matter of who controls the government. Anyway, soon afterwards Microsoft refuted what Steve Ballmer had said:

Microsoft said Thursday it is not pursuing an acquisition of Yahoo, despite public comments by Microsoft CEO Steve Ballmer Thursday suggesting a deal between the two companies might still be on the table.

Here is another post which discusses this wild manipulation of stock prices using false promises. This up-and-down of emotions is unhealthy and definitely unhelpful.

[W]ithin an hour of the news, Microsoft (MSFT) spokesman Frank Shaw issued an statement to retract Ballmer’s comments. “Our position hasn’t changed. Microsoft has no interest in acquiring Yahoo!; there are no discussions between the companies,” Microsoft said.

The Fear of Google

Is Microsoft's obsession with Google justified? Well, Google seems to be doing pretty well now, unlike Microsoft which relies on buybacks.

Google has defied the skeptics. The Web search leader reported third-quarter earnings that far exceeded the expectations of analysts, especially those who thought the company might finally fall victim to the slumping economy.

For Google, it's revenue up 31% and profit up 26%.

The notoriously free-spending Google Inc. cinched its belt in the third quarter and delivered another strong financial performance Thursday, defying fears that it would fall prey to the growing economic turmoil.

MarketWatch published this article about Google-Microsoft rivalry and their latest political tiffs.

It's no secret that Microsoft Corp. and Google Inc. have been engaged in a war for the hearts and minds of the average Internet user, with both companies taking different approaches to undermine the other and chart the direction of the Web.

As pointed out a few days ago, Microsoft is already losing some lucrative contracts in the enterprise space because of Google. Alley insider has some more details.

Google Docs is often talked about as a competitor to Microsoft’s cash cow – the Office Suite – but the talks usually refer to some point in the future when everyone’s running their applications in the cloud. That day is coming.

The Crime

Speaking of enterprise and search, guess how that fraud investigation is coming along. It's pretty much confirmed now. From IDG:

Norwegian police on Thursday charged Fast Search & Transfer with accounting fraud, an enterprise search company bought by Microsoft in January for US$1.2 billion.

More in The Register:

Norwegian economic crime police have raided the headquarters of Microsoft-owned Fast Search and Transfer and charged the firm with accounting fraud.

Although it seems highly improbable, one reader wondered if this company might serve as a place for Microsoft to launder money in. It's not as though Microsoft was never caught engaging in fraud before. ⬆