Yahoo! and the future of the Internet
The openness of the Internet is what made Google — and Yahoo! — possible. A good idea that users find useful spreads quickly. Businesses can be created around the idea. Users benefit from constant innovation. It's what makes the Internet such an exciting place.
Context & Ripple Effects
The post lands two days after Microsoft moved on Yahoo, and Google is answering with its official voice rather than silence: David Drummond frames the web's openness as what made both Google and Yahoo! possible, implicitly casting Microsoft's bid as a threat to that substrate. The framing did not travel alone — the New York Times ran it as "Google Assails Microsoft's Bid for Yahoo," GigaOM read it as a response to "MicroHOO," and Microsoft general counsel Brad Smith issued his own statement the same day, so this is already a two-company public argument, not one company's blog post.
The rhetorical ground was prepared in advance. Business Week had profiled Yahoo's "Open Invitation" strategy of opening up in late 2007, and Valleywag had spent 2007 asking what if Google looked like Yahoo? — meaning both companies arrive at this fight having already staked claims to openness. Commentators immediately noticed the strain: TechCrunch asked whether Google can still claim to be David to Microsoft's Goliath, and Rough Type titled its take "Goliath's slingshot," reading the post as the incumbent borrowing the underdog's weapon.
First-order effects
- Yahoo gains a powerful ally in resisting Microsoft's offer without spending anything: Google's dominance of the online advertising market gives its antitrust-flavored warning weight, and press coverage shows the argument landing same-day across NYT, GigaOM, and TechCrunch.
- Microsoft is forced to fight the deal's legitimacy battle in public, with Brad Smith's same-day statement marking the first direct corporate rebuttal rather than letting the bid be evaluated purely on price.
Second-order effects
- Jerry Yang's negotiating position improves if Google's support is real — though the reported Schmidt-to-Yang call remains unconfirmed, the mere possibility pushes Microsoft to price for a defended target rather than a willing seller.
- Yahoo's pre-existing openness strategy stops being just product positioning and becomes deal leverage, since any Microsoft integration plan now has to argue against the very openness Yahoo has been marketing since 2007.
Third-order effects
- If the pattern holds, 'openness' hardens into a standard competitive instrument: large platforms invoke the open internet defensively against consolidating rivals, which pressures regulators to judge deals like this one on innovation and competition grounds rather than price alone.
- The episode sharpens the structural question of whether search advertising consolidates around two players or three — Google's confirmed dominance of online ads makes the Microsoft-Yahoo combination the last plausible counterweight, raising the stakes of how the bid resolves.
The trend: Platform incumbents are converting openness from a design philosophy into a rhetorical and regulatory weapon against consolidation, with the Microsoft-Yahoo fight as its sharpest test yet.