Microsoft and Yahoo?

Reported today, Microsoft and Yahoo have re-enter talks to strike a deal to help fend off Google. How many times have we heard these whispers?

A Yahoo-Microsoft combination would account for 38% of all U.S. searches compared to Google’s dominate position of 48% of all searches. This will certainly close the gap domestically, but until both parties improve their efforts to monetize search they will be playing catch up.

Also, a deal could conceivably help Microsoft to re-energize their MSN and Live.com brands or better yet kill them off in favor of Yahoo. However, in the end, it will all come down the integration or lack thereof.

Although there are upsides to be sure, bigger doesn’t always mean better.