Microsoft announced its plans to acquire Yahoo for $44.6 billion early last month in an attempt to give itself increased market share and momentum. However, Yahoo board members turned down the original offer, citing that the $44.6 billion figure was too low. Yahoo shares were negatively affected by the board’s response and many felt that Yahoo was pushing its luck.
Despite the rejection, Schmidt remains fearful that a merger may still occur.
"We would be concerned by any kind of acquisition of Yahoo by Microsoft. We would hope that anything [Microsoft] did would be consistent with the openness of the Internet, but I doubt it would be," said Eric Schmidt, Google CEO.
Microsoft has had a long history of buying out many of its small competitors, absorbing the technologies and reintroducing many of them back into its own products. Even with industry and legal criticism, the software giant has proven itself to be very successful in turning around small businesses into giant cash cows for its own.
Yahoo board members successfully delayed a hostile takeover by Microsoft earlier this month. Now, officials from both companies are meeting to peacefully hammer out a deal. After the initial rejection, Microsoft issued a formal letter to Yahoo stakeholders, urging them to take the offer. Earlier this month, Microsoft CEO Steve Ballmer said he would succeed in catching up, if not surpassing, Google in market share.
Schmidt did not share Ballmer’s vision. "We are concerned that there are things Microsoft could do that would be bad for the Internet. The things that it has done have been so difficult for everyone," said Schmidt.