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Last month, Microsoft proposed buying Yahoo in a deal originally worth $44.6 billion, but Yahoo's board has rejected the offer, saying it was too low.

Read why Jon Honeyball can't see the logic of a Microsoft Yahoo merger here<

"We would be concerned by any kind of acquisition of Yahoo by Microsoft," says Google chief executive Eric Schmidt. "We would hope that anything they did would be consistent with the openness of the internet, but I doubt it would be."

Schmidt pointed to Microsoft's past history and "the things that it has done that have been so difficult for everyone", but he did not elaborate.

Last year, a European court upheld a landmark 2004 decision that Microsoft abused the near-monopoly power of Windows to damage competitors, along with a 497 million euro fine. "We are concerned that there are things Microsoft could do that would be bad for the internet," said Schmidt.

Microsoft chief executive Steve Ballmer pledged earlier this month that his company would gain market share against Google in online advertising and web searching, even if it led to his "last breath" at the company.