Google may seek Yahoo! alliance to rebuff Microsoft

Google is said to be in talks with Yahoo! about creating a business alliance that would help the beleaguered search veteran fend off a hostile takeover bid by Microsoft.

Google has already published a highly-critical opinion of the proposed deal.

Having said that a merger between Microsoft and Yahoo! would undermine the "underlying principles of the internet", Google is reported to be trying to put obstacles in the way of the deal.

The Wall Street Journal reported yesterday that Google chief executive Eric Schmidt telephoned Yahoo!'s Jerry Yang to offer help in rebuffing the bid.

Reuters reported that Yahoo! bosses were considering an alliance with its rival.

Google and Yahoo! held talks towards the end of last year about a potential alliance, and Reuters reported that Yahoo! management is considering a return to those talks.

David Drummond, Google's chief legal officer, released a statement denouncing the deal as the behaviour of a monopolist bent on destroying the internet.

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"Microsoft's hostile bid for Yahoo! raises troubling questions," he said. "This is about more than simply a financial transaction, one company taking over another.

It's about preserving the underlying principles of the internet: openness and innovation."