If the deal goes through consumers will lose their third option among the major search algorithms. Maybe this will give Ask an opportunity to build up its search share but it will have to sever ties with Google to do that.

If the deal goes through advertisers can expect to see their traffic acquisition costs increase as more bidders are pitted against each other. Unless the combined inventory is segmentized, people won’t be able to target by demographic the way they can now.

If the deal goes through Microsoft will be able to walk away from Yahoo! in ten years with all the search business and Yahoo! will have to start over from scratch (assuming it can even survive that long).

If the deal goes through the cost of optimizing for multiple search engines will go down and homogeneity will creep into more queries, thus eliminating more niche marketing opportunities for small sites as the big database-driven, made-for-advertising sites take over.

If the deal goes through we’ll see less competition in the search industry and competition for search results placement will intensify.
.-= Michael Martinez´s last blog ..Microsoft and Yahoo! antitrust concerns =-.

This is just an evidence that they are finding ways on how to face their future, so I guess it’s okay.
.-= Bennie Stark´s last blog ..Dallas Millionaires Meet Up For The First Time =-.

Harvard Business did an original take on the deal which is well worth reading, it includes:

We don’t have all the details of the alliance, but what we have is not encouraging. The deal is for 10 years. That sounds impressive if you don’t know that most alliances — especially those in the internet world — don’t last half that long. The companies will cooperate on technology and search. But they will keep separate web presences, separate sales forces, separate user data, and so forth. No wonder that they expect implementation to take 24 months — an eternity in Google Standard Time.

Then there’s the pre-nuptial agreement on what is left out of the alliance: “each company’s web properties and products, email, instant messaging, display advertising, or any other aspect of the companies’ businesses.” We are told that “in those areas, the companies will continue to compete vigorously.” Ah, co-opetition — the defensive shield of partners unwilling to commit — surfaces yet again. Google will rest easy; after all, it has its sights on precisely these areas where the new partners agree to fight each other to the death.

It may be surprising that the PhDs at Yahoo and Microsoft could not come up with a smarter deal. But it shouldn’t be. Business combinations are fraught with emotions that interfere with strategic thinking. Even when partners intend to create joint value, govern a combination efficiently, and share returns equitably, these goals easily get overshadowed by dysfunctional thoughts. Like control and independence. Pride and arrogance. Secrecy and defensiveness.

http://blogs.harvardbusiness.org/now-new-next/2009/07/microsoft-and-yahoo-too-little.html