Google's dominance in search, coupled with its software-related forays, may drive Microsoft to acquire Yahoo or eBay to become the top internet revenue earner, writes MediaPost, citing a report by Merrill Lynch analysts. The Microsoft-Yahoo combination would immediately challenge Google in search, with search traffic roughly evenly split between Google and a merged Yahoo/MSN, according to the report.
That would allow MSN to "leverage query share to build economies of scale in its advertising network, which should lead to higher query prices through more competitive advertiser bidding," posits the report. But Microsoft first needs to evaluate the performance of its recently launched adCenter online advertising platform.
The analysts also considered an MSN-eBay deal, concluding it too could "lead to significant traffic and monetization improvements for both the MSN and eBay platforms."
