Google says independent Yahoo better for business

By Kenneth Li

SUN VALLEY, IDAHO (Reuters) - An independent Yahoo Inc (YHOO.O) is better for business, Google Inc (GOOG.O) Chief Executive told reporters on Thursday, saying a combination with Microsoft Corp (MSFT.O) would be anti-competitive.

"The world is better off with an independent Yahoo," Google CEO Eric Schmidt told reporters. There's "more competition ... in search, and more competition in the other advertising markets where Yahoo is a leader."

Microsoft made an unsolicited offer to buy Yahoo for an estimated $47.5 billion (24 billion pounds) earlier this year, but after Yahoo sought a higher price, Microsoft walked away from the discussions.

"The moment we saw the offer from Microsoft, we saw it as anti-competitive," Schmidt said. "It's easy to understand. Look at Microsoft's history."

Yahoo later signed a search advertising deal with Google that is now being reviewed by U.S. regulators. Schmidt said the company is expected to face hearings next week with regulators reviewing whether its search advertising deal with Yahoo is anti-competitive.

Schmidt spoke with reporters at the annual Allen & Co gathering of media and technology moguls, where discussions of the high-profile Yahoo-Microsoft-Google situation theoretically could be taking place since people from the companies are present.

However, Yahoo CEO Jerry Yang told Reuters on Thursday that he was not likely to meet with representatives of Microsoft at the conference.

Critics have said Google's pact with Yahoo was designed to thwart Microsoft's advances, but Schmidt has long argued that its advertising deal was nonexclusive and would allow Yahoo to pursue other advertising partnerships, including with Microsoft.