Google believes a Microsoft/Yahoo deal will create a near-monopoly which will stifle innovation in areas like instant messaging.
So it's forging ahead with a long-term advertising deal with Yahoo that would increase its profitability and help to protect its autonomy.
"If you put 90% of communications in one company, that's really a big risk, especially one that has a history of doing bad stuff," said Larry Page, co-founder of Google at a New America Foundation meeting.
Microsoft walked away from negotiations to buy Yahoo, but may come back with an offer to buy part of the company.
Page says Google would support a deal that would keep Yahoo as an independent entity.
He also believes that an advertising deal between Google and Yahoo would be able to overcome any potential antitrust problems.