Internet Stars Wars

The current unprecedented dogfight between software giant Microsoft against search giant Google over Yahoo Inc. is really admirable. It shows perhaps that this is more than just an agressive acquisition attempt as the stakes are very high.

When looking into this from a top level perspective Microsoft and Google are fighting over domination of the web. A deal between Microsoft and Yahoo will give the software company a considerable chunk of the search market, up to 30%. This means that there will be a valid contender in the search field.

Another area that will change the landscape is the domination of the email services market. Microsoft and Yahoo will cover 80% of the free email market. This is really significant in terms of advertising revenue.

But this is not all. There are many more areas where Microsoft can directly compete with Google even taking a shot at it's most popular services.

The online marketing agency community watches from the sidelines and secretly hopes for a deal to bring more competition in the space. Internet users are split, but Microsoft critics (and there are many) do not want to see the company trying to dominate yet another space with it's corporate approach. After all Google is giving out a lot more useful services, adding value. Would Microsoft do the same or would they try to charge for everything in the same way they do for their software?

Competition tends to drive prices down and give more negotiation powers to advertisers.
Given the past of Microsoft is this good news or bad omens?