In Heavyweight Battle, Trying to Avoid a Knockout

As for whether Google or the Microsoft-Yahoo buyout would pose the greater danger for competition, each company has a case to be made, experts said.

Microsoft has pitched the deal as a means of confronting Google's dominant position in Internet search and the lucrative advertising that goes along with it. Google's search engine conducts -- and provides side-by-side ads for -- 62 percent of the world's Web searches, according to ComScore, a marketing-research company. Together, Yahoo's and Microsoft's search engines would have about 16 percent of the market.

"The combination of Microsoft and Yahoo will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising," Brad Smith, Microsoft general counsel, said in a statement released Sunday.

Indeed, many small and midsize Internet-based businesses have argued that Google could use more competition, because as the dominant search engine it does not have enough incentive to meet their needs.

"Google is a power," said David Steiner, president of AuctionBytes.com, an independent trade publication for online merchants, which registers more than 5 million page views monthly. "When you are building a site, e-commerce or a publication, you are really dependent on paying for Google AdWords to get visibility," he said, referring to Google's advertising system which allows marketers to buy ads associated with certain search terms.

He added that dealing with Google can be frustrating to Web sites and small retailers because their methods seem to change arbitrarily.

"They may change search algorithm. They may change payout," Steiner said. "It's all a deep, dark mystery."

Jonathan Zuck, president of the Association for Competitive Technology, a trade association of 3,000 companies that has received financial support from Microsoft, said many were waiting for another company to rival Google.

"Advertisers and customers and even Wall Street have been looking at this for some time to see if a viable competitor to Google could be created," he said.

He said Microsoft's previous troubles with antitrust regulators are too often used to portray the company as "the boogey man."

"I think that's getting a little old," he said. "I think people are a little more afraid of the Googley-eyed monster at this point."

On the other hand, Google and others have warned that the combination of Microsoft and Yahoo could give them a dominant share of e-mail and instant-messaging accounts.

In addition, Google and some public policy experts have warned, if Microsoft acquires Yahoo, it could set up its market-dominating Internet browser to automatically run Yahoo services, possibly to the exclusion of other services.

The buyout could mean "that the next great idea that competes with any of the Yahoo software might never see the light day," said Ben Scott, policy director at Free Press, a public-interest firm. "There's certainly cause for great concern from an antitrust perspective."

Staff writers Tomoeh Murakami Tse in New York and Kim Hart contributed to this report.