The head of internet search giant Google has made a plea for the independence of arch-rival Yahoo, saying it would be better for business.

"the world is better off with an independent Yahoo," Google chief executive eric Schmidt said. "there's more competition...in search, and more competition in the other advertising markets where Yahoo is a leader."

Yahoo drove away Microsoft, which made an unsolicited $47.5 billion (£24.01 billion) offer. but Schmidt casts doubt on whether regulators would have allowed the deal.

"We saw it as anti-competitive," Schmidt said at the gathering of media industry heavyweights in Sun Valley, idaho.

"Microsoft has a long history of having deals that look quite good and end up looking not so good when you read the fine print."

Yahoo has subsequently signed a search advertising deal with Google, which is facing its own regulatory review. Schmidt expects to face hearings next week with competition authorities.

News Corporation boss Rupert Murdoch predicted it was "very unlikely" there would be a deal between Yahoo and Microsoft. "there is too much bad feeling between them," he said.