Microsoft’s lobbying tab dwarfs Google’s tally

But Google already has spent more on lobbying this year than it did for all of 2007 as the Internet search company starts to emerge as a formidable player in DC lobbying circles.

The lobbying muscle of both companies was on full display in recent months as Microsoft and Google battled over Google’s plans to sell some of the online advertisements that appear alongside search results on Yahoo Inc.’s Web site. Google and Yahoo entered into the partnership in June in an effort to keep Yahoo out of Microsoft’s hands.

But Google walked away from the deal last week in the face of an antitrust challenge being prepared by the Justice Department. That retreat marked a key victory for Microsoft, which had mounted a major lobbying and public relations offensive to convince the government to block the agreement.

It’s unclear whether the outcome would have been different without Microsoft’s efforts as it was hardly alone in opposing the deal. Some of the nation’s biggest advertisers also had warned that the partnership would drive up the cost of online advertising and cement Google’s control over the market.

Microsoft had “the tail winds working in its favor," said Stanford Washington Research Group analyst Paul Gallant. But he added: “Microsoft played this about as well as it could be played."

Jeff Chester, executive director of the Center for Digital Democracy, a consumer advocacy group that opposed the deal, went even further. “It is possible that the Justice Department might have come to a different conclusion" had Microsoft not become involved, he said.

Indeed, it has escaped no one’s attention that the Bush administration has allowed many big, controversial mergers to go through, including Google’s recent purchase of online ad service DoubleClick.

While Microsoft and Google were on opposite sides in the battle over the Yahoo partnership, they have found themselves aligned in other big lobbying fights. The two companies led a recent push to open up “white spaces" - the unused, unlicensed spectrum between television channels - to deliver wireless Internet access. That effort paid off when the Federal Communications Commission approved the use of white spaces for broadband last week.

Google and Microsoft also have been key proponents of reforming U. patent laws to address a mounting backlog of applications and halt the increase in infringement litigation often driven by poor-quality patents.

In both cases, the companies have faced off against other powerful industries with deep pockets and well-established lobbying arms in Washington. In the white spaces fight, Microsoft and Google took on the National Association of Broadcasters. In the patent reform dispute, they have battled the nation’s big pharmaceutical companies and other industries that want to leave the existing system intact.

Microsoft has had a presence in Washington for years, which it beefed up significantly after becoming the target of a major Justice Department antitrust suit in the late 1990s.

But Google is catching up. The company spent $2.1 million on federal lobbying during the first nine months of this year, compared with $1.5 million for all of 2007. And while not all big technology companies have chosen to play active roles in the nation’s capital, Google wants to be a key participant.

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