Google takes a particular satisfaction in pursuing this line because in the last year the search giant has been fending off a similar volley of complaints about one of its own acquisitions, the $3 billion friendly takeover of the online ad company Doubleclick. Who was complaining? Microsoft. It was an odd stance from Microsoft to take, considering it had spent the past decade arguing that monopolies don't really exist in the ever-shifting landscape of technology. And after whining over a $3 billion Google deal to buy an ad company, Microsoft bought a different ad company, aQuantive, for $6 billion. Now, of course, it's proposing to pay $45 billion for Yahoo. But that's different!

Where does Yahoo stand on the antitrust issue? At one point in its communications, the company cited the discussion of the regulatory hurdles that would come of such a powerful merger. But word has leaked out that one of Yahoo's alternatives would be to subcontract its search efforts to Google, so it could cut costs and focus on media and services. Such an arrangement, however, would boost Google's already massive market share in search--probably to the point that regulators would knock down the deal, say experts.

All of this is like one of those optical illusions where your mind perceives one picture until someone points out to you that there's a totally different way of looking at the image. Depending on the market that people consider, the takeover is either an egregious boost to Microsoft's power or a tonic to Google's excessive search share. The lesson seems to be that technology companies--once valiant defenders of the idea that the government should keep hands off this dynamic marketplace--are eager to see regulators jump in to temper a runaway market leader. Unless of course, the company is that leader.

It's fun to watch the posturing on both sides. Enjoying the spectacle most of all will be the lawyers who bill the participants. But ultimately, none of it will probably matter. (For the record most observers think that if the takeover happens, the deal will be approved by regulators, perhaps with some conditions that Microsoft sell off part of the combined operation, and certainly with continued oversight.) During Microsoft's trials in the '90s, a lot of people worried that if the company won the browser war it would dominate the Internet. Well, Microsoft crushed Netscape--but it has consistently lost money on its Internet services (more than $700 million last year alone). Its failure to out-innovate upstarts like Google has led Microsoft to its current adventure--paying $45 billion for a company whose lunch is also being eaten by the search giant.

© 2008