He also noted that a combined Microsoft and Yahoo would control two of the world's most-visited websites, plus an "overwhelming share" of the instant messaging and Web-based e-mail markets.
"Could a combination of the two take advantage of a PC software monopoly to unfairly limit the ability of consumers to freely access competitors' e-mail, IM and Web-based services?" he wrote.
Microsoft General Counsel Brad Smith fired back Sunday, writing statement that Google held a huge lead over Microsoft and Yahoo combined in the number of searches it performed and pulled in 75% of all search-related advertising revenue. "The combination of Microsoft and Yahoo will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising," he wrote. "The alternative scenarios only lead to less competition on the Internet."
Lawmakers and regulators have raised concerns about Google's dominance in online advertising. However, in December, they blessed its planned acquisition of ad-delivery company DoubleClick Inc., a deal their European counterparts are still considering. That combination, many fear, would extend Google's industry power and give it more tools to track the habits of Web users.
Microsoft's inability to keep up with Google in Web services pumped up its interest in Yahoo, leading to an offer 62% above the Web veteran's value the previous day. Yahoo has been bleeding market share to Google, and a partnership with Microsoft would give it a trove of new resources to help it fight back.
Yahoo said on its website that deliberations could "take quite a bit of time" as it considers its options, including remaining an independent company.
"People are more sorry that Yahoo is in trouble than that it's being chomped by Microsoft," said Paul Saffo, a longtime Silicon Valley forecaster.
That's a change in attitude from the past, when Microsoft was pilloried for choking companies such as Netscape Communications Corp., which developed the first commercial Web browser.
The tech industry has left the era of browser operating system wars far behind. Many of Microsoft's old foes now do business with it. Apple Inc. was saved in 1997 by a Microsoft investment that shocked Mac enthusiasts. By 2000, when Netscape co-founder Marc Andreessen's next company agreed to endorse Windows, the locals were more amused than bewildered.
