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Google hints Bing! pact will curb competition

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Though it controls somewhere between 65 per cent and 73 per cent of the US search market, Google is hinting that the Microsoft-Yahoo! search pact will hinder competition.

"There has traditionally been a lot of competition online, and our experience is that competition brings about great things for users," reads the company's canned statement in response to the Microhoo! tie-up. "We're interested to learn more about the deal."

Meanwhile, company poster child Marissa Mayer has apparently told the IDG News Service that the deal will likely be a negative for competition and for consumers - though she too seemed to indicate the company was still studying the pact.

"Everyone runs faster in a race where there are more people," she said, according to IDG.

Last year, when Microsoft first bid $44.6bn to acquire all of Yahoo! - not just run its search engine - Google publicly attacked the bid, and soon inked its own search pact with then-Yahoo!-CEO Jerry Yang in what turned out to be a successful play to fight off Microsoft's acquisition.

But Google eventually pulled out of the deal after the US Department of Justice questioned the antitrust implications and threatened to file suit. Which may be why Google says it's still mulling the Bing! pact.

Under its ill-fated Yahoo! deal - which Eric Schmidt and company spent four months fighting for - Google might have controlled 90 per cent of the search market. And though a Microsoft Bing! engine would command a mere 30 per cent or less, Google still questions whether it would hinder competition.

Some have indicated the deal with actually bolster competition, including Yahoo! CEO Carol Bartz. "Competition equals innovation," she said in a blog post. "But with one player dominating 70 percent of search, that field has been pretty lopsided. This transaction will create a healthy competitor that’ll keep everyone on their toes."

But although Microsoft will significantly increase its search reach, Google maintains its 65-to-73 per cent market share. Yes, some advertisers might defect to Microsoft if they can now reach 30 per cent of all search eyeballs via a Google competitor - rather than just 10 or 20. But if you want maximum volume, there remains only one place to go. And that won't change.

Google is still a verb. And that may be the reason why - as The New York Times points out - Microsoft and Yahoo! refuses to repeat it. ®

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