Let’s Discuss:
MicroHoo, YahSoft… whichever way you mash it up; it’s official! The Microsoft/ Yahoo deal proposed last summer has finally received clearance from U.S. and E.U. regulators.

EMG 30-Second Rundown:
What does this mean aside from some serious fist pumping from Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer?

We’re entering a new era of search with an alliance that aims to challenge Google’s market dominance. Yahoo and Microsoft shadow Google with recent comScore reports ranking Google’s share of searches at 65.7%, followed by Yahoo and Microsoft at 17.3% and 10.7% respectively.

Combining search from Yahoo and Microsoft will expand the collective data pool from which Microsoft can further develop, test and tweak platforms, search-related features and algorithms. The enhanced performance will boost both companies’ ability to compete against Google by improving search results, as well as amplifying appeal to search advertisers.

Taking over Yahoo’s search functionality will grant Microsoft access to nearly three times the search queries it’s receiving independently. The increased search volume will enable accelerated algorithmic innovation resulting in more relevant results for a larger pool of search queries.

Delegating search duties to Microsoft frees up Yahoo to focus investment on areas in which they excel including building their portfolio of destination web properties and display advertising capabilities.

So what will this new alliance look like? In a nutshell, Microsoft (Bing) will power Yahoo’s organic and paid search platforms while Yahoo will handle premium search advertising sales for the combined unit.

Celebrations for overcoming this regulatory milestone will be short-lived as the companies’ goal will is to have U.S. implementation completed by the end of 2010. Further details can be found on the official Search Alliance site.

EMG Takeaway:
Attention advertisers, marketers, shareholders and general search enthusiasts (i.e. everyone)… prepare yourselves because the real battle for search market dominance is about to begin!

We’re going to see more performance improvements, more product innovation and better integration from all players as Google’s monopolistic advantages wane under increased competitive pressure.

Google may be forced to up the ante on traditional media buys (e.g. “Search Stories” Super Bowl spot) to defend against Bing’s mass media quest for search mind share as the “Decision Engine.”

Ultimately, this deal is going to mean different things to different groups of people. However, we will all benefit from stronger competition in the search marketplace as it forces companies to work harder for our loyalty.

Final Words:
There will be big changes in the search market landscape with the Microsoft/ Yahoo search alliance rapidly coming to fruition. Maintaining and acquiring search share will demand that key players (and challengers) diversify product offerings without diluting the meaning behind their brand promise.

While search is as much a societal mainstay as the internet, the business of search is still very much in its infancy. Whether the search engine on top will be Google, MicroHoo or a new challenger, one thing is certain; the biggest winner will be the engine able to monetize search services beyond “10 Blue Links” and banner inundation in a manner that benefits searchers, advertisers and publishers.

Three Questions to Continue the Discussion:
1.)    How is this going to affect SEM campaign management?
2.)    What efforts will Google take to maintain search dominance?
3.)    Preferred mashup; MicroHoo or YahSoft?