Wednesday, March 04, 2009

Google CEO wishes Microsoft, Yahoo! luck on search

Google chief executive Eric Schmidt wished rivals Microsoft and Yahoo! luck on Tuesday in competing on Web search but took aim at the software giant for what he called a "history" of trying to "restrict consumer choice."

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"Microsoft is working very hard to build a competitive search engine," the CEO of Internet search king Google told a Morgan Stanley technology conference in San Francisco.

Asked about the prospects of a Yahoo!-Microsoft tie-up on search, Schmidt said: "I don't know if that scenario will occur.

"We did our best attempt at a deal with Yahoo!, and as you know we had to cancel it at the very last minute," he said in a reference to a Google-Yahoo! search advertising partnership that was rejected by US anti-trust regulators.

"So we wish them the best of luck," Schmidt said.

"The problem has to do with Microsoft's ability to use its Windows monopoly to restrict consumer choice," the Google CEO added. "That's not a new subject, it's been discussed at great length.

"So anything that Microsoft would do that would eliminate consumer choice with respect to search engines, Internet browsers, distribution, for which it was previously found guilty, are of concern and there's a history of that.

"So that's what we worry about," Schmidt said. "So long as technologies are competing on a fair to fair basis I think that's great."

Schmidt also said the search market was not "settled."

"There's obviously a lot of innovation ahead of us," he said. "It looks like people will move very quickly from one search engine to another. A majority of people say they use more than one search engine.

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"Search as it's defined, as historically it has been defined by Google, is not settled at all," he said.

Yahoo! chief executive Carol Bartz addressed the same conference and said Internet search data remained "extremely important" to the company.

She also said any talks with Microsoft would remain private.

"We've been investing in search this last tumultuous year," the new Yahoo! CEO said. "We've actually improved the search experience.

"Search data is extremely important and we would never debone the company of missing what our customers value by (knowing) what they're looking for."

Asked whether Yahoo! would enter into talks with Microsoft, Bartz said: "I'm not going to negotiate with my 50,000 favorite friends" -- a reference to the software giant's employees.

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"If we're going to negotiate it's as companies negotiate and that is privately," Bartz said. "And if something happens you'll know it then, and until then there's no comment on it."

Bartz, who replaced Yahoo! co-founder Jerry Yang as CEO in January, also identified products she considered "core" to the Sunnyvale, California, firm.

"Core is the front door, core is news, finance, core is mail," she said.

"All the other things, everything's up for examination," Bartz said, adding that she had created a "wall of shame" of "products we're not so happy with."

Bartz didn't identify such products but let slip she prefers a Google product to a Yahoo! one. "I don't use Yahoo! maps, I use Google maps," she said.

Bartz also said Yahoo! was interested in social networks but added: "I do not think we can invent the next Facebook."

The comments by Schmidt and Bartz came as Microsoft confirmed it is testing a new Internet search engine known as it hopes will make the software giant a player in a market dominated by Google.

Microsoft tried last year to buy Yahoo! for 47.5 billion dollars in a vain effort to merge online resources to better battle Google, which rules more than 60 percent of the US online search market.

Yahoo!'s share of the market is about 21 percent and Microsoft trails with 8.5 percent, according to recent figures from industry tracking firms.

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