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Page: Google-Yahoo deal can clear antitrust wall

Google billionaire co-founder Larry Page said Thursday the Internet search leader opposed a Microsoft-Yahoo deal because it would monopolize the online communications market, stifle innovation and curb competition.

But he discounted the idea that an advertising deal between Google Inc. and Yahoo Inc. – one the two companies are now exploring – would present any potential antitrust problems.

In a rare visit to the nation’s capital, Page spoke at a forum sponsored by the New American Foundation think tank about expanding affordable access to high-speed Internet service and opening up cellular networks to more applications, services and devices.

The territory was friendly as Google Chief Executive Eric Schmidt was recently elected chairman of think tank, which counts telecommunications and technology policy in its varied body of work. Schmidt, a board member since 1999, was not at the talk.

Page said a successful Microsoft-Yahoo deal would have closed ”a lot of things that are really important … like instant messaging.”

Microsoft Corp. had sought to buy Yahoo for $47.5 billion as a way to counter Google Inc.’s dominance in the search and advertising market, but recently broke off talks.

”Now, if you put 90 percent of the communications all in one company … that’s really a big risk, especially one (Microsoft) that has a history of doing bad stuff,” he said.

Court oversight of Microsoft’s market power began in 2002 after an antitrust settlement was reached among Microsoft, the federal government and 17 states, barring the software maker from seeking deals with computer makers to exclude rival software. It was intended to also keep the company from using its operating system monopoly to hinder competition in other products. Microsoft also faces scrutiny in the European Union, where regulators have opened two antitrust probes.

Google and Yahoo are exploring a long-term alliance to show Google ads alongside Yahoo search results after a two-week trial last month showed Google’s technology could help boost Yahoo’s profits.

Antitrust obstacles can’t be ruled out, as the two companies control more than 80 percent of the U.S. search advertising market.

While he said Google has a large advertising share, ”there are ways in which to structure a deal with Yahoo that will be reasonable … especially given the alternatives they have, which aren’t great either.”

Page also made the white-space case, talking up Google’s push to use fallow TV airwaves, or so-called white spaces, for affordable broadband service and other similar initiatives. He also said Google is participating in a government spectrum auction to open up cellular networks to more devices, applications and services.

Google strongly supports such initiatives, he said, because it would increase competition, spur better innovative products and provide more Internet access, generating greater revenue for the Mountain View, Calif.-based company.

Michael Calabrese, a vice president with the think tank, earlier said the Google co-founder met with lawmakers and Federal Communications Commission officials, but Page later declined to give disclose any names or any details of his Washington itinerary.

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