Google reacts negatively on Yahoo! bid

Mountview, Calif. -- Google Inc. has initiated a campaign to prevent -- or at least slow -- a possible merger between Microsoft Corp. and Yahoo! Inc., a report Monday said.

Google Chief Executive Eric E. Schmidt called Yahoo!'s chief Jerry Yang to discuss strategies for a counter offer and Google's lawyers investigated the possibility of an anti-trust suit, The New York Times reported.

Other Google executives made, "back-channel" calls over the weekend to companies like Time Warner, trying to assemble a better offer than Microsoft's proposed hostile bid of $44.6 billion, which was announced Friday.

Options include breaking Yahoo! to more affordable components but any package would be pricey, analysts said. "No one can get to a $44 billion price even if you split it into a dozen pieces," one unnamed executive told the Times.

Google was also hoping some relief might be available by having regulators declare that the deal suffocates open competition.

"Google can tap into all of the ill will that Microsoft has created in the last couple of decades on the antitrust front," Eric Goldman, director of the High-Tech Law Institute at the Santa Clara University School of Law, said to the Times.

Copyright 2008 by United Press International.