Will Microsoft-Yahoo Deal Hurt The Internet?

Now that the proposed Microsoft deal for Yahoo seems more likely to happen, attention is turning to the potential impact it would have on the Web. Eric Schmidt, the CEO of chief rival Google, is quoted today as saying such a merger "would be bad for the Internet" because it would threaten openness and innovation. This argument seems a bit far-fetched, since a combined entity would pose more competition for Web giant Google than Yahoo would alone, and that should foster a more competitive environment. Nevertheless, the issue is attracting worldwide attention because Schmidt's remarks were made at a Beijing gathering.

Seems to me the real issue here is whether Microsoft is going to wind up overpaying for a battered brand (think Time Warner buying AOL). The channel has a stake in the outcome: Microsoft has been a lot more dedicated to the channel than has Google, and any resultant Web-centric strategy that Microsoft develops is more likely to include the channel as a partner.

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