Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

How Microsoft Could Harm Google By Exiting Search

Posted by Tom Foremski - January 14, 2013

Long time Google [$GOOG] watcher Scott Cleland has floated an interesting strategy that Microsoft [$MSFT] could adopt in the wake of its failed attempt to have the FTC pursue anti-trust prosecution of the search giant: exit the search business.

Microsoft has never made a profit from its search business, which loses about $2 billion a year. If it abandoned search, Mr Cleland says that the action could harm Google in several ways:

- It would show that no one in search can make money because of Google's massive presence globally.

- It would take away Google's claim that Microsoft competition is just one click away.

- It would allow Microsoft to file a private antitrust lawsuit that could bring triple penalties if it won.

Unlike the FTC, the experts at the DOJ and EU have long understood the stark reality of the search advertising business because they approved the highly-unusual combination of #2 Yahoo and #3 Microsoft search advertising competitors in a three competitor market in a last ditch effort to salvage a competitive search market.

...

Ironically, Google blames Microsoft for all its antitrust woes. However, without Microsoft as a competitor, Google’s antitrust liabilities would skyrocket.


Read more: http://dailycaller.com/2013/01/14/what-if-microsoft-exited-the-search-business/

 

 

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