Page last updated at 17:44 GMT, Monday, 19 May 2008 18:44 UK

Google mulls Microsoft response

By Rory Cellan-Jones
Technology Correspondent, BBC News, Hertfordshire

Gordon Brown at Zeitgeist conference
Prime Minister Gordon Brown spoke at the Zeitgeist conference on Monday

Google's bosses are meeting in Britain on Monday evening to discuss a response to Microsoft's new talks with Yahoo.

Google's chief executive Eric Schmidt and the founders Larry Page and Sergey Brin are at the company's European "Zeitgeist" meeting in Hertfordshire.

They told journalists they had only just heard of Microsoft's latest move and needed to consider their reaction.

Microsoft said on Sunday that it was considering a deal with Yahoo that would not involve a full buyout.

The Reuters news agency is reporting that the potential deal would involve buying Yahoo's search engine business and a minority stake in the rest of the company.

Asked for his comments, Eric Schmidt said: "It's too early. After this press conference the three of us will meet and decide what our response is."

Dominant position

The three also insisted there was no reason for any concern about Google's dominant position in search advertising, which is the reason Microsoft has cited for its interest in acquiring Yahoo.

A worker walking past Yahoo headquarters

"Google is doing very well in what is a very small part of a very large industry," Mr Schmidt said.

Sergey Brin said that Google had ended up in such a strong position because it delivered a better product, and he added that his company had not used the "strong-arm" tactics adopted by some firms that had fallen foul of the competition regulators.

In its battle against Microsoft, Yahoo has been working with Google in recent weeks on a pilot of its rival's search advertising technology.

Mr Brin said the two teams had worked very well together.

Employing Yang

Asked whether Google would ever consider employing Yahoo's Chief Executive Jerry Yang if he lost his job he said: "Jerry is very talented and if he wants to work at Google we'd be very excited to have him, but I don't think that's going to happen."

Questioned about privacy, the two Google founders insisted that it was social networks, not search engines, which were the main cause for concern.

"Social networking is the big problem," said Larry Page, explaining that when it came to search data," there's been very little evidence of damage."

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