photo credit: zen

Does a combined Yahoo! Microsoft make sense? No probably not. Both have structural issues that make integration likely to compromise both of them. Neither company is particularly search motivated these days. They make money from advertising through their portal aspects, news, mail, etc. and search is just one of the channels. If ever there were a company that could compete and steal the lime light from Google it would be a focused search company with search as their only goal.

I’m not sure who seeded the idea to me, but I think that Microhoo Search is only feasible if it is a separate and dedicated organization that is all about search. Searching the web, searching mail, searching news and searching the portal aspects of the combined services. Yahoo is very good at being a portal, they should focus on that and let their organic and paid search go. Microsoft is a software juggernaut , but they can’t even implement Office Live in a way that is particularly compelling, they should let their organic and paid search go.

As it stands Microsoft is not really in a position to integrate Yahoo! in total into their organization. But if Microsoft only buys Yahoo! Search or does something as radical as jointly creating a Search/Advertising organization that is separate from the parent organizations and has the agility to out pace Google by leveraging the combined network of Microsoft and Yahoo! as distribution channel we could see a dramatic shift on the web.

After managing and analyzing countless pay-per-click campaigns I feel confident saying that volume is the real weak point for paid search competitors of Google. Right now Microsoft and Yahoo! should be piecing up and making trades to create a more future-forward paid search complex.

On the Internet business as usual will kill a good opportunity. It will create a beached whale of search that will be slowly dying. These two companies need to take advantage of this opportunity to make something very different.