microsoft vs google...

...more like ballmer vs schmidt!

google doesn't think microsoft should acquire yahoo!. google's primary objection to microsoft's 31.7 billion euros (44.6 billion us dollars) yahoo! bid is based on antitrust regulations. google should tread carefully since it too can be accused of engaging in antitrust behavior by blocking microsoft's bid.

google will have a hard time fighting off microsoft over the yahoo! bid. i base this claim on the fact that microosft has cash. with cash, they can retain the services of their very powerful legal team. the fact that they haven't made a hostile bid in the past suggests that they are ready to duke this out including through a proxy fight with yahoo!'s board. with cash, microsoft has the option to engage in a tender offer which will allow them to negotiate with yahoo!'s shareholders directly, bypassing the board. simply put, microsoft is wealthy and can afford to pay a high premium for yahoo!'s shares.

although google rarely acknowledges that it is the dominant player in internet search and advertising, it is. microsoft and yahoo!, separately or as one company, have nothing on google. however, microsoft has a lot going for it; it is larger by market capitalization, roughly 55 billion euros (80 billion us dollars) more than google. microsoft also owns ninety percent of the desktop operating system market, an assets that makes it easy to force windows users into using microsoft products and services.

in as much as microsoft need's to diversify its portfolio from the desktop to the internet, market watchers should be sensitive to the rivalry between microsoft's ceo, steve ballmer and google's ceo eric schmidt. this business rivalry will play a factor in the yahoo! bid. schmidt's professional career includes stints at companies that directly compete with microsoft. with bill gates leaving microsoft later this year, ballmer will have more say over microsoft's technical vision (this was bill g's job). ballmer's aggressive leadership style and his propensity to publicly criticize microsoft's competition will make for an interesting fight with google over the yahoo! bid.

below are a few companies, products and services that schmidt, either directly or by association, has been a part of. it should help illustrate why ballmer is in this to win, and win he will. however, microsoft should learn that it can't be all things to all people. this is why google and apple are so successful thus far, they specialize.

note: schmidt has worked at sun, novell and is on apple's board of directors.

• mark lucovsky (google) - poached by google. lucovskly was a key player in the development of microsoft's flagship network operating system, windows nt. windows 2000, xp, server 2003, vista, home server, server 2008 are all based upon the windows nt system. he also did some work on windows live id, formerly known as .net passport; briefly known as microsoft passport network.
• java platform (sun) - operating system independent, mainly used for server programming in the java programming language. it is a competitor to microsoft's .net framework, a large library of pre-packaged solutions to common program requirements written specifically for the framework. the .net framework, unlike sun's java platform, is intended to be used on the windows platform.
• mono (novell) - a project led by novell to create a .net framework compatible set of tools. mono is operating system independent.
• novell netware and suse linux (novell) - network operating systems geared toward business customers. direct competitor to microsoft's windows server product.
• mac os (apple) - apple's primary operating system since 1984. competes with windows operating system. watch mac vs windows ads.
• ipod + itunes and itunes store (apple) - a popular portable media player managed by itunes software. itunes store sells media files at very competitive prices. together, these products give apple an edge over microsoft's zune media player and zune market place.
• iphone (apple) - an internet-enabled multimedia mobile phone designed with a touch screen with virtual keyboard and buttons. the iphone, like the ipod, competes with the zune media player and possible microsoft's windows mobile smart phones.