Yahoo looks forward post-bid

For the moment, Yahoo and Google each occupy their own corners of the Internet market. While Google is cer­tainly the giant of online including search and display ads, Yahoo still has a strong search engine and is has the second most important display ad network. Yahoo and Google both have strong brands and large loyal audiences.

Microsoft, on the other hand, is a tech­nology company more than an Internet company. Google is trying to be both, and is succeeding by offering Google Apps and various other applications. Yahoo, which also offers paid search and display ads, is also sometimes positioned as a content publisher, with original con­tent across a number of sectors.

If Microsoft succeeds in its pursuit of Yahoo, the combination of Yahoo's online presence and Microsoft's technol­ogy reputation would create a powerful opponent to Google.

A silent player in the game is AOL. While AOL is primarily a portal, it has a strong online advertising presence in its properties Advertising.com and Tacoda, and the Platform-A offering that has been growing in recent years. While it does not power search in-house, it does have a search engine on its portal, which has a large audience.

“If the Microsoft-Yahoo merger goes through, it could put AOL in a more tenuous position,” Gartenberg added. “But it is a fluid industry and we'll have to wait to see how it plays out.

Some in the marketing industry are awaiting the time when there will be one fewer search engine on which to buy ads. While Google and Yahoo are the leading platforms, most marketers agree that advertisers have to buy on all three portals: MSN, Yahoo and Google. Cut­ting one out could give marketers the opportunity to buy more ads on the sites with more traffic. And, analysts predict that since Microsoft is known for its com­petitive pricing, it could potentially keep the cost of search words down.

As Yahoo continues to release new products and vies for customer attention, the big question that remains is whether or not Yahoo still has any playing power in the industry.

“It does seem that Yahoo is between a rock and a hard place,” Gartenberg said. “It can stand alone on its own, but the question is whether or not it is going to be allowed to.”