Following Microsoft’s failed bid to buy Yahoo!, a deal is underway for Google to gain control over Yahoo’s search advertising. Presumably this means that Google adwords will spread to Yahoo! increasing coverage while removing choice. With Google taking over 90% of the internet advertising revenue, this would certainly impact on Microsoft’s Live Search wallets, but could wipe out existing smaller search engines and any future competition Google could ever have.

It would also affect smaller businesses in terms of getting a competitive deal on online advertising as the choices would be removed, prices could go up, the smaller voices would be muffled, and advertisers would have nowhere else to turn.

Yahoo! anticipates additional revenue from the deal, presumably Google will do too (else why make the deal) and all this extra cash is coming from somewhere.

Microsoft is making noises, they’ve been in court for similar practices with Micrsoft Windows Monopoly and now they want their own back. There are talks from their corner of price-fixing similar to the UK’s big supermarket agreements where minimum prices are set further hitting the smaller businesses. Microsoft’s best move now would be to file an antitrust lawsuit through the US Justice Department as happened to them prior to 2002 when the case was settled.

As there’s no merger, the Google Yahoo! partnership (hereafter known as Goohoo!) would not need to go through the US Justice dept. but they can challenge the agreement if it’s shown that competition would be stifled.

Goohoo! have agreed to give the deal a 2 1/2 month for the dust to settle and to back out if Yahoo! is ever bought. (Perhaps a collaborative effort to push Microsoft towards a higher bid?) They also deny any claims of potential price fixing and minimum ad costs.

Good idea? Bad idea? Your views and comments are welcome:

Brilliant article written by Guy Levine. Original text here. He explains the difference between SEO and Adwords, that both are good, but when to effectively apply them.

Welcome to the great debate: “Do I pay every time someone clicks on one of my little adverts on Google, ranging from 5p to £25 per click, or do I hire an expert to dominate the natural listings (the free ones on the left hand side)?” Guy Levine. chief executive of Web Marketing Advisor, gives us the lowdown.

Pay per click, Google adwords, search engine marketing and sponsored listings are all names for pay per click. You choose a word or phrase you want, you bid a price, then an advert is displayed when someone types the word or phrase into Google. When someone clicks, you pay.

Search engine optimisation – or SEO to the cool young internet types – is the process of inducing “Google love”. Basically, tweaking the pages of a website to make the search engines love them. I know there are other search engines, but at the moment Big G rules!

On the other hand, pay per click allows hungry entrepreneurs to have their websites ranking on the front page of search engines (Google, Yahoo, MSN) within as little as three hours. Yes, you have to pay but you get visibility. Another great benefit is that you can run multiple adverts, all 128 characters of them, to test the best hooks. Google will even tell you which one people love the most.

Search engine optimisation is the long game. You tweak your site, you wait for the search engines to update their listings, you tweak again, you wait. Sometimes you get it right, sometimes you get it wrong. But boy, when you get it right! The first result on page one is better than the icing on the cake, it’s internet nirvana.

Let me share one word of warning. It’s fine being number one, but you need to make sure you are number one for a word which people search when they want to buy, not just browse.

SEO, I love it, but my best advice is to always run a PPC campaign first. Choose your keywords, test them and make sure your site converts. When it does, crank up the SEO.

Get them both right and there’s gold there in them there hills!

Guy Levine is the chief executive of search engine optimisation firm Web Marketing Advisor.