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Yahoo and Microsoft’s merger has been in the news since 2007. It has since failed and has been re-opened. While nothing much has been happening as far the merger goes, Microsoft and Yahoo are both key players in their own areas. A marriage between these two giants would create a veritable company that could influence the future of the Web and the behavior of other key players in the computing world, both offline and online.

It’s sure to take a direct aim at Google, Yahoo’s erstwhile rival and competitor, which has since overtaken Yahoo to be online search’s top dog.

Moreover, Google has not been very quiet about its intentions to topple Microsoft. In various press conferences and press releases following the launch of Google’s Chrome browser, Google didn’t mince words in saying that the new browser would provide a platform for applications that would put offline applications–traditionally viewed as Microsoft’s domain–online. If Google pulls it off, Microsoft would be forced to compete with it in a new arena: online applications, and would see its market dominance eroded, at the very least.

Microsoft’s alliance with Yahoo will place both companies at a better position to compete with Google: that is, if they can get their respective acts together. Yahoo will get additional funding, better management and a much-needed boost to help it regain its dominance in search and online advertising, while Microsoft can capitalize on Yahoo’s online strength for its offline applications and gain more online revenue it needs to subsidize its free products and services.

Ordinary Web browsers would be the ones to benefit from the increased competition between Yahoo/Microsoft and Google. With the increased competition, creative innovations are sure to follow at a decreased cost for consumers. With more and more products at more competitive prices, Web browsers and computer users can expect better services and experience.

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