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Google CEO: Microsoft-Yahoo Deal Would Short-Change Consumers94955

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In an exclusive interview with CNBC's Maria Bartiromo to air Wednesday afternoon, Google CEO Eric Schmidt said that a Microsoft-Yahoo! merger would deprive consumers of choice. From the advance transcript:

BARTIROMO: What kind of a combination would you like to see with Yahoo!? What kind of a partnership would you like to see?

Dr. SCHMIDT: Oh, well, we actually enjoyed working with Yahoo!. We also compete with them. They're a well run and, I think, impressive company. We've primarily been concerned about the possibility of a Microsoft acquisition of Yahoo! because of Microsoft's history and because of the assets that Yahoo! has are quite valuable. And we actually think that in the wrong hands, they could be used in the wrong way.

BARTIROMO: What do you mean, Microsoft's history?

Dr. SCHMIDT: I think people are aware of the anti-trust trial from 10 years ago. Microsoft has a long history in that area.

BARTIROMO: Yeah, you can bet, I guess, who tipped off the DOJ about the phone call that was made, Steve Ballmer or somebody from that side.

So what do we know about Microsoft and Yahoo!? Tell me this. I mean, I know that, you know, we're waiting on possible news from Microsoft, possibly, a hostile--we don't know what's going to happen next. But what kind of a challenge would Microsoft/Yahoo! be for Google?

Dr. SCHMIDT: Well, today we actually do not know what's going on. We read in the press that there's discussions and we'll see what they decide to do. If they go ahead and the merger's ultimately successful, it would be possible for Microsoft to integrate some of the properties and essentially eliminate consumer choice, particularly in electronic mail, instant messaging, the things where they have 80 or 90 percent market share, and that's a sweet spot for Microsoft in its ability to eliminate choice.

The full interview airs on CNBC at 4:00pm ET Wednesday.