So That's What The EU Does With All That Microsoft Money

Now I get it – The EU takes money from the Microsoft ATM with one hand, and then invests it in a sure-to-fail “Google Killer” with the other.

€99 million to Thomson and 22 other European companies to create Quaero, a multimedia search engine (Danny Sullivan notes Thomson was already in this business and then sold it off). This is on top of €120 million approved last year for Germany’s Theseus research project, which will develop and test new search technologies for the Internet.

Quaero and Theseus were originally the same project, but split in 2006 to focus on their respective markets.

The projects will need lots more funding down the road, so look for more withdrawls from Microsoft. And if that well runs dry, they can always figure out something to charge Google with and get a little of that action, too.

Of course, I’m stretching the facts here to make a point. The EU is simply allowing the French and German governments to make these investments with their own taxpayer’s money. There is no direct link between Microsoft fines and these subsidies. But the point is the same – the EU is not willing to let free markets determine winners and losers. The winners must be home grown, at any cost. And U.S. companies that have too much success in Europe seem to face a bleak choice – massive fines or government-backed competitors. It’s absurd. And it’s no wonder that many of the best European entrepreneurs keep coming to the U.S. to start companies.