Google and Microsoft aren't known for playing nice with each other, and now it seems both companies are taking that show on the road to Washington, where lawmakers watched executives trade barbs over Google's proposed deal to sell ads on Yahoo's search results.
Testifying before the House Judiciary Committee, Bradford L. Smith, SVP and general counsel of Microsoft, charged that Google's deal with Yahoo would put the company in a position to literally own what he called "the gateway to the internet." Smith also alleged that Yahoo co-founder Jerry Yang, who had previously met with Microsoft officials to discuss a bid to acquire his company, had said that a deal between Yahoo and Google would effectively create a search monopoly.
Michael J. Callahan, EVP and general counsel for Yahoo, initially said he would not address Smith's allegation. Later, Callahan said he was at the June 8 meeting where Yang allegedly admitted a deal with Google would reduce competition, but said he could not recall Yang's statement.
For its part, Google rejected Microsoft's attempt to portray it as a bully.
"Microsoft has a long history of abusing and extending its dominant positions through anticompetitive practices," David C. Drummond, SVP and chief legal officer for Google, said in a statement. "For years, Microsoft has been working to leverage that lock-in onto the freer and more open world of the internet."
While Congressional leaders said that more information would be needed to determine if Google's deal with Yahoo would have anticompetitive effects, many in the advertising industry are already worried. Yesterday, SearchIgnite, a firm that helps advertisers manage and streamline their search campaigns, issued a report saying that keyword prices could jump as high as 22 percent if the deal takes effect.
The Justice Department is also looking into the deal.
