As the day continues, the talk of a Microsoft/Yahoo! union is sounding more and more specious.  None-the-less I thought I'd weigh in with my take on what this pairing would mean for interactive marketers.

I still think Yahoo and MS are wrong to continue to chase Google.  If that is what this potential merger about it just seems really naïve.  Billions of dollars to try to “catch up” to a company that will only continue to out-innovate them.

If this merger focused on combining the brain-trust of MS and Yahoo to develop something new – not just trying to sell paid search and display ads, better than Google -- then there could be something really valuable to marketers here.  What would be the "something new?"  Maybe some of the new capabilities AdCenter Labs has in the works – detecting online commercial intent, or measuring the influence of one ad on another.  Or some new way to determine “relevant” search results based on a combination of a search alogrithim and peer usage/review.  Or, a new social media ad format.  Or my personal favorite – expanding the online ad exchange model beyond remnant inventory to become the way that online ads of all types are bought and sold.  And then expanding this exchange model into other media as well.

If we presume MS and Yahoo would innovate instead of just follow Google, and then the WIM for marketers is:

Expect a new way to advertise online to develop. Forrester believes that the combined brain trust Microsoft and Yahoo will focus on developing new advertising methods and products to counter Google’s continued innovation in paid search marketing and ultimately online display ads.  This means that instead of just copy-cat search marketing programs, marketers will find new models available through MS/Y like natural search results which combine algorithmic and peer usage, targeting based on commercial intent, and bid-based media buying available on all types of display or text-based ad units.