Geoffrey Long
Tip of the Quill: Archives
I vote for "Microo!" and "Goople".

Obviously the hottest story on the wire this morning is Microsoft's $44.6B bid for Yahoo! (That wasn't meant to be exclamatory, but writing "Yahoo!." just looked odd.) Given that the struggling Internet giant just announced on Tuesday that it would be cutting a thousand jobs, reported internal concerns that Jerry Yang can't rally the troops and the departure of Terry S. Semel all point towards a great big "ACQUIRE ME" sign Scotch-taped to the company's forehead, and the fact that Microsoft's bid places a 62% premium over yesterday's closing stock price ($31 a share bid versus $19.18 a share on the market) suggests that this might well go through.

If it does happen, the resulting megacorp may suddenly give Google new cause for alarm, which might (but probably won't) lead to a merger between Google and Apple, followed rapidly by an entire raft of antitrust suits, and possibly both companies' lobbying the Fed for recategorization of Internet and computing services as utilities.

Mr. Bastin, would you like to use your legal superpowers to explain why this won't happen? :-)


Yeah, so....

Obviously, the Justice Department does whatever the hell it wants to, so I can't say there wouldn't be anti-trust suits, although they're less likely if republican wins the next election than if a democrat wins. However, to get anti-trust problems, you need two things: 1) a monopoly-like position (arguable in this case), and 2) Use it to suppress trade (benevolent monopolies are in fact fine under the law, it just never happens - someone inevitably has to pretend that they're wronged somehow).

Usually what determines a "monopoly-like position" are predatory trade practices (massively undercharging for your product to drive other people out of business, for example), and/or high barriers to entry to your market. The barriers to entry into what Google and Yahoo! do are still really low, and predatory trade practices are limited when you don't sell your product. Google may spend millions developing web applications, but they're not technologically out of the reach of 3 guys in a Vanagon for a given application.

As for recognition of the internet as a utility....yeah, I dunno about that. I've thought at times that it's a great idea, and other times that it was a terrible idea. Designation as a utility will undoubtably bring about a certain level of regulation, and that's invariably going to be bad. Unless, of course, the federal government purchases all of the internet cabling in the US and the leases it back to the service providers, which might not be a terrible idea.

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