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Silicon Valley taking Microsoft bid in stride

Its Yahoo offer doesn't rile Bay Area techies as it once might have. Google is the new titan to contend with.

The Nation

February 04, 2008|Michelle Quinn, Joseph Menn and Jessica Guynn, Times Staff Writers

MOUNTAIN VIEW, CALIF — . -- It was a tenet of faith: If you worked in Silicon Valley, Microsoft Corp. was evil.

During the 1990s, Microsoft used its monopoly in computer operating systems to bully so many Silicon Valley companies that some people called it the Beast from Redmond, a reference to its headquarters in Redmond, Wash. Smaller tech players did everything they could to stay out of its way.


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Microsoft's current main competitor on the Web, Google Inc., still doesn't look kindly on the software giant. A blog post on Google's corporate website Sunday said Microsoft's $44.6-billion bid for Yahoo Inc. raised "troubling questions" about maintaining openness on the Internet and referred to Microsoft's "inappropriate and illegal" past behavior.

But the broader reaction here to the prospect of Microsoft snapping up a local icon illustrates how attitudes have evolved.

For the most part, technologists now see Microsoft as tolerable, not pernicious. It might be sad that struggling Yahoo might join a company whose commercial power far exceeds its ability to innovate, many believe, but it's not the end of the world.

"Most of the valley has moved on from the anti-Microsoft days," said Talal Shamoon, chief executive of Intertrust Technologies Corp., a digital rights management company that successfully sued Microsoft for patent infringement.

That may be because there's a new beast in their own backyards: Google.

The Web has supplanted the PC desktop as the center of the computing ecosystem, and Google has capitalized on that shift better than any other company. Although Microsoft's profitability hasn't waned, its influence has.

In recent years, Google has turned Web search into a fast-growing, high-margin gold mine. The company is attracting an ever-bigger share of advertising dollars and Silicon Valley engineering talent to fuel ventures into such burgeoning markets as online video and mobile services.

But Google doesn't wield its power in the manner that got Microsoft into so much trouble. (Last week a U.S. district judge extended until November 2009 the court oversight of Microsoft stemming from its landmark antitrust settlement with the government.) And Google isn't willing to consider Microsoft's transgressions ancient history.

In the statement on Google's website, General Counsel David Drummond argued that Microsoft's "hostile bid" should be examined in the context of its previous "inappropriate and illegal" tactics.

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