Microsoft's bid for Yahoo will most likely succeed.  Using what used to be called a "bear hug", MSFT's bid puts Yahoo's board in a position where they almost have to sell the company.  While there will be much talk over the next few days about "white knight" offers from News Corp and others, this is mostly posturing by Yahoo to get MSFT to raise their bid.  While possible, it is unlikely anyone will want to fight MSFT over Yahoo. 

Expect to see MSFT make a token increase in their offer -  this provides face saving air cover for the Yahoo management team and board - followed by a quick deal close. 

So what does this mean for small business??  I think there are several impacts:

1.  Most small businesses we talk to that use SEO and paid search tell us they focus exclusively on Google.  The reason they give is quite simple - they have limited time and budgets and simply don't see any reason to use the other search engines. 

Yahoosoft will change this.  The combination will create a more attactive small business SEO and paid search platform. Silicon Alley Insider has more on ad agency response to the deal.

2.  Despite Google getting all of the press, Yahoo gets more overall traffic.  Adding in MSFT's traffic will create a very viable overall competitor for Google.  Search is another story - Google simply dominates and will continue to do so after the merger.  But for small businesses looking for content related marketing opportunities, Yahoosoft will be a better choice than Google.  Hitwise has a nice post covering the traffic implications.

3.  Yahoo and Google both are both strong in mobile and local.  Yahoosoft will be even stronger and force Google to invest and innovate more aggressively in these areas.  The result will be more oportunities and innovation in mobile and location based services.

4.  MSFT has always courted small 3rd party developers.  Yahoo less so.  Yahoosoft will be more open to working with small 3rd parties once the post-merger trauma settles down.   

5.  Although many at Yahoo will welcome the merger, others won't.  Between stock option gains, standard post merger layoffs, and the specter of being forced to join the dark side many will leave Yahoo.  This will lead to a wave of new start-ups as these Yahooligan's look for new opportunities. 


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