Wired: Monopoly, Microsoft And The Anti-Google ‘Conspiracy’

Wired offers a fascinating, if sensational, account of the “plot” by Microsoft, its allies and its operatives to sew discontent over Google’s proposed paid search deal with Yahoo: The Plot to Kill Google. The article presents Microsoft as the driving force, along with other allies, behind an effort to stop Google’s further dominance in search (via the Yahoo deal) after its own failed bid for Yahoo.

Here’s an excerpt:

[John Kelly, Microsoft's head of strategic relations,] sprang into action, activating his company’s vast Washington infrastructure.Microsoft’s protracted antitrust battles had left it with an army of lawyers and lobbyists and deep institutional knowledge of which politicians to approach and how best to sway them. Soon, Microsoft’s lobbyists were meeting with Herbert Kohl, chair of the Senate’s Antitrust Subcommittee. By early July the subcommittee was holding hearings. In October, Kohl wrote to [Tom Barnett, assistant attorney general for antitrust] warning that “important competition issues are raised by this transaction.”

But that was all familiar, the kind of campaign Microsoft had routinely run. Kelly wanted to take a different approach this time—not just opposing the deal but persuading other interested parties to speak out as well. The arguments of a known competitor may not sway the Justice Department, but customers’ opinions hold special influence. If advertisers—Google’s customers—voluntarily declared their opposition, the DOJ would listen closely.

Kelly turned to Michael Kassan, an advertising consultant who had been advising Microsoft off and on since 2002. Kassan—whose clients have included AT&T, Disney, and Viacom—recently had been named by Advertising Age as possessing the third-most-impressive Rolodex in the industry. Kelly asked Kassan to start talking to his contacts and drum up opposition to Google. Kassan assured him he knew just how to do it; there was plenty of fear and mistrust of Google among advertisers. “Google has badly misjudged how it is perceived,” he reassured Kelly. “We have a clear and easy story to tell.”

Other “Google enemies” mentioned in the story include AT&T, the National Association of Broadcasters, Verizon, Comcast and several others.

The story casts Google as the green (as in naive) political victim of more experienced and cunning adversaries who saw Google disrupting or undermining their respective franchises and markets. The now-tarnished myth of American capitalism is that markets are transparent, fair and operate largely on their own. In fact, as this case shows in microcosm, success in the “free” or “open” market is as much about politics and political influence as it is almost any other factor.

The Wired piece even implies the killing of the Google-Yahoo search deal is partly a Republican political vendetta for Google’s historical support of Democrats. However U.S. Senator Herb Kohl, chairman of the Senate Antitrust Subcommittee and Google critic, is a Democrat.

As much as Microsoft may have orchestrated the objections to the Google-Yahoo search deal, Google’s hands aren’t entirely clean either. Google was involved in thwarting the MicroHoo deal, by throwing Yahoo a search lifeline and providing some political cover for former Yahoo CEO Jerry Yang who wanted to find a way to preserve the independence of his company. And as much as the Wired piece portrays a conspiracy, as the quote above suggests — “We have a clear and easy story to tell” — Google’s increasing success itself raised concerns in enough quarters that it was not hard organize opposition to the deal.

Success is admired in this country. Too much success breeds envy, distrust and fear.