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Say you need 30 percent of the search market...

You've tried the whole do-it-yourself method. You ordered the videos from the 3am infomercial, designed a search engine, promoted it via your quasi-monopolistic hold on the browser and operating system industries, but you're still losing market share to some weird people in China. Despite the fact that your name is virtually synonymous with the computer industry and have a long history of crushing anyone with whom you wake up one morning and decide to compete, most people are still searching with some dirty hippies from California who can't even correctly spell a fakey number made up by a 9 year old kid.

It's enough to drive anyone crazy, really. In a world of Coke vs. Pepsi, you're not even RC Cola. Fortunately, you remember you're sitting on insane amounts of cash and decide to just buy it instead.

With that, comes the news that Microsoft has made an unsolicited 44.6 billion simolean offer to current second place search engine, Yahoo! The offer was over 60 percent more than Yahoo's stock valuation the previous day. Nobody has said "deal", yet, but so far we're at the "all signs point to yes" stage. The boring financial details aren't going to be the centerpiece of the SEO blog world today. No, it will be the rampant speculation about what the search landscape will look like if the deal goes through.

So, without further ado, let us commence to speculating.

Everything Old is Still Old Again

One of the the core issues here is that Microsoft had, up until this point, attempted to compete on the same playing fields as both Google and Yahoo. Its Live search engine, AdCenter advertising network, and MSN /Live portals are all reflections of existing offerings within Yahoo. Yahoo search was, briefly, the king before those upstarts from Google entered the fray. Yahoo has their Search Marketing service, itself bolstered by the acquisition of Overture. It is perhaps best known now as a "portal" to the web at Yahoo.com. That creates a duplication of effort across the board in any merger.

It's a duplication that Microsoft is aware of, but one they aren't really providing any specifics for dealing with at this point:

"Microsoft has developed a plan and process that will include the employees of both companies to focus on the integration of the combined business. Microsoft intends to offer significant retention packages to Yahoo! engineers, key leaders and employees across all disciplines."

They have a plan. Comforting, I'm sure, to everyone involved.

What Stays, What Goes?

The share of the search marketing being key to the reasoning for the buy, then it's reasonable expect the short, frail existence of the Live Search to come to an end. Ms. Dewey, we hardly knew ye... This is not to say that, eventually, elements of Live Search might not make it into Yahoo Search. If the development teams are combined to create one big mash-up of Yahoo and Live search, then, hopefully, the best features of each will make it into the end product. The resultant "Yahoo Live Search" could become the Google-killer that Microsoft so desperately desires.

From a purely selfish perspective, I'd prefer Live Search take over, if only because we do really well there, keyword wise. If only it actually gave us any traffic... Oh yeah, that's why Microsoft wants to buy Yahoo in the first place.

Ad networks are little trickier than search. The barriers to change are much higher for ad networks. Users have accounts, preferences, billing info, and all their spend history tied up in those ad networks. Forcing them to change from one platform to another could cause distress at best, and exodus at worse. They certainly don't want to give customers any additional "incentive" to try AdSense.

Portals may seem the easier thing to integrate, but what of all the features behind those portals? A Yahoo or MSN account is more than just a way to customize your start page. They tie into numerous services that each company offers, from groups to social networks, photo sites, and sundry other services. What happens to my Yahoo Instant Messenger? Will it be integrated with Live Messenger, or will the networks simply be able to see and talk to one another? Questions like this abound, and all the answers are "wait-and-see" at this point.

The Block and the Bidders

Perhaps the biggest unanswered question in all of this is whether Yahoo will suddenly draw other bids now that Microsoft has opened the door. Microsoft's offer was literally "out of the blue." Even though Yahoo was going through some layoffs recently, they had not made any public overtures towards sales. Speculation about who might buy Yahoo over the years hasn't been confined exclusively to Microsoft. If Google decides it might not be such a great thing if MS sets up camp in Yahoo HQ, they could also offer to buy. Google has pretty deep pockets these days.

A Google Yahoo marriage would create a search monopoly that would be of, well, Microsoft Windows proportions.

The search landscape will change in a big way if this does go down. We will be living in "post-merger" world, where uncertainty abounds. At least until we get a lot more press releases. Should be pretty exciting, no matter what happens.