While it doesn't have the cash on hand to match or exceed Microsoft's offer -- few companies on Earth would -- Google went out of its way over the weekend to defend its chief competitor as an innovator, and is doing nothing to quell rumors as to what more it might do.

It could be a public relations move, to stave off criticism that Google's dominance in the paid search and advertising fields are forcing its competitors to coalesce in order to survive. It could also be a serious move by Google to offer itself as a "white knight," giving Yahoo an alternative to being swallowed whole by Microsoft.

In either event, Google made its own play over the weekend in the Microsoft + Yahoo acquisition matter. First, it put forth a public position by way of David Drummond, its Chief Legal Officer. "Microsoft's hostile bid for Yahoo raises troubling questions," Drummond wrote on one of his company's blogs Sunday morning. "This is about more than simply a financial transaction, one company taking over another. It's about preserving the underlying principles of the Internet: openness and innovation."

"Could Microsoft now attempt to exert the same sort of inappropriate and illegal influence over the Internet that it did with the PC?" Drummond continued. "While the Internet rewards competitive innovation, Microsoft has frequently sought to establish proprietary monopolies -- and then leverage its dominance into new, adjacent markets."

The phraseology here is important. While US antitrust law is relatively lax in granting a company that is dominant in one market leverage to make inroads in another market where it is not dominant, European law is not nearly so lax. In fact, it's the European Commission right now that stands as Google's remaining obstacle in its plan to merge with display ad provider DoubleClick. EC lawmakers have not been willing to allow two companies -- even outside of their own boundaries -- to build one giant that would immediately be the dominant player in all Web advertising within their boundaries.

But Microsoft is perhaps the ultimate pariah in modern European antitrust law, and if Google can perhaps gain anything in the short term from this strategy, it could be the ability to redirect regulators' fears toward the possibility of a much bigger devil...one a possible merger with DoubleClick would actually help thwart.

Both the content and the timing of Google's position gave financial news sources plenty of time to determine whether Google was willing to back up that defense with a little incentive. Of course, the company is declining official comment beyond its own public postings, though reports from The Wall Street Journal and Reuters this morning (again, perfect timing) cite anonymous "persons familiar with the matter" as saying Google is entertaining the idea of offering some kind of alliance to Yahoo.

Though the WSJ story did not say so outright, perhaps because "persons familiar with the matter" were too familiar to want to get too detailed just right away, such an alliance might resemble Google's 2005 pact with AOL, in which it paid $1 billion for a 5% stake in the Time Warner division.

Conceivably, the existence of such an alliance could serve as a "poison pill" against Microsoft, which would not want to find itself having absorbed one competitor that maintains a standing alliance with a bigger one. Rumors throughout 2005 persisted that Time Warner might be looking to spin off AOL, and that Microsoft would be one potential suitor.

Yesterday, Microsoft's own chief counsel, Brad Smith, played a careful but strategic move by issuing a brief statement with definitively more terse language than the warm and embracing offer to which he contributed on Friday. "The alternative scenarios only lead to less competition on the Internet," stated Smith, before reminding readers that Google currently has a 65% search share to Microsoft's and Yahoo's combined 30% in the US, and an 85% to 10% split among the same players...in Europe.

Google's move followed a slight update by Yahoo to its public stance over the weekend, in classic Yahoo style posting an FAQ on the subject. There, refuting stories late Friday citing more "people close to the matter" as having said Microsoft only gave Yahoo 48 hours to respond, Yahoo said it was thoroughly considering the benefits of Microsoft's offer. "That process will take some time," the FAQ reads, "but the Board will ultimately pursue the option that it believes can best maximize value for our shareholders."

Yahoo's own employees got very few more details than that, in a memo signed by CEO Jerry Yang and new non-executive chairman Roy Bostock, who replaced Terry Semel on Friday. That memo was uncovered over the weekend by Silicon Alley Insider blogger Henry Blodget.

"Microsoft's proposal is one of many options that we're evaluating in order to maximize value for our shareholders and employees over the long-term," the memo reads, continuing Yang's tradition of writing in all lower-case. "that's why we will respond to microsoft after our board has completed a careful review of all of our strategic alternatives."