Competition is a good thing. We all know that. And now, as Microsoft goes on the hunt for corporate partners to help break up Yahoo!, Yahoo! gets scrutinized in a monopoly investigation for holding hands with Google.

As your comments to my previous posts testify, we all want to see competition breeding more creativity at the top of the Internet industry. But whichever way Yahoo turns right now, it looks like a backward step.

Are there really only 2 options? Does it have to be either Microsoft OR Google. Or is it possible that an investment angel can swoop in to keep Yahoo! independent and free it from the vultures.

Who could it be?

News Corp?… Time Warner?

Each of these would have good reason, if only to assist Myspace and AOL respectively.

Or perhaps Microsoft will succeed in embracing both these players in a joint take-over deal and dividing the spoils between them.

Wouldn’t it be ironic if the company with the highest competition legal bills in history, is subsequently responsible for fragmentizing its arch rival?

Google-hoo!

Google and Yahoo! are prevented from starting work on their combined search advertising deal for 100 days while the US Dept of Justice investigates it.

The deal would give them 80% of the web search market. Now that can’t be a good thing…!

So which would you rather? Google, Microsoft, or a Microsoft-led sell-off.

Or has anyone got Warren Buffet’s telephone number? – perhaps he could step in to give the industry a future inclusive of Yahoo! as we know it.

Which outcome do you prefer?

In a letter to shareholders, Yahoo!’s Roy Bostock (Chairman) and Jerry Yang (CEO) have explained that the Microsoft offer will benefit Microsoft more than it will Yahoo!, and that Carl Icahn’s proposed new board won’t add value to the company.

Like a wounded animal, Yahoo is hoping to find its escape by an alliance with Google instead of a take-over by Microsoft.

In this latest letter, the beseiged company is appealing for shareholders to keep the current board rather than vote for Carl Icahn’s proposed replacements. (See below).

With Google waiting (rather more patiently) in the wings, Yahoo loyalists led by Bostock and Yang, are hoping they can move forwards with Google’s 10 year plan bringing $800 Million per year instead of Microsoft’s $7.73 billion investment and $1bn-per-year deal.

It looks like it will come down to a battle between those who are emotionally involved in the culture and values of Yahoo! against those who are driven by optimizing the financial outcome.

Let me know how you think the Internet would change if there were no more Yahoo! – would you miss it?

Reading between the lines, I suspect Icahn has little to do with it, and it is more a case of the Internet protecting its precious own. Only a couple of days ago it was announced that Google were in high-end talks with Yahoo about matters beyond the current advertisement-sharing model. Unlikely to be a all-out takeover, analysts have predicted a rescue package which will start slowly and gather pace for mutual advantage.

Meanwhile, Yahoo’s shareprice has plummeted while Microsoft remain aloof and disinterested about their previous takeover bid.

Yahoo!’s recent departees have included Stewart Butterfield and Caterina Fake (co-founders of Flickr), Jeff Weiner, Usama Fayyad, Jeremy Zawodny and JR Conlin.

Each of them are giving no solid reasons for their departure, in fact Stewart Butterfield’s strange resignation letter only adds further intrigue to the riddle.

Watch this space… and listen out in a couple of weeks for an announcement of what they’re all up to.

The plot thickens. Do contribute with a comment if you know more…

This year will see an important milestone in the history of advertising. For the first time, online ad revenues in the UK will be more than what is spent on TV.

Surprisingly, this statistic is yet to be reached in the USA, where TV ad spend will be around $72.56 billion this year, about a quarter of all ad spending, according to Interpublic Group’s Universal McCann.

And yet research last year showed that teenagers in the USA were spending an average of only 2 hours per week watching television. By far the greater proportion of their time is spent on the Internet and computer gaming.

Online advertising globally has grown by at least 20% in all years except the 2 straight after the Internet bubble burst, and according to private equity and investment firm Veronis Suhler Stevenson, it is projected to grow at at least the same rate through to 2010.

So this UK milestone will be seen in other countries too within the near future. Veronis anticipates that spend on other ad media will show marginal growth in the same time frame: broadcast TV (4%); satellite TV (10%); newspapers (2.2%); and radio (3%)

Online Ad Revenue growth since 1996

Source: Pricewaterhouse Coopers LLP

The signs are clear. If you’re not giving your company a presence online already, then the longer you wait, the more difficult it will be.

If you want to benefit from this rush of online advertising then you have to have somewhere for your target audience to go, and something for them to do when they get there. If not to buy, then at least give them somewhere to sign up, to indicate their interest in your product so you can build trust and reinforce assurance with them.

Participants of my Freedom Classes realise what can be done when current methods of online automation are put in place to create exponential growth.

If you’d like to learn more about these classes, go here.

Here’s an interesting case for anyone looking to build a new service online…

Wayn, (Where Are You Now), is one of the UK hopefuls in the race for social networking dominance.

Founded by Peter Ward in 2005, it targets young single people with freedom to travel.

It is now gets 6.5 Million visitors each month, and has an Alexa rank of 835. It grew from nothing by using Google adwords to attract its initial signups, and by offering free international SMS texts.

In doing so, it was reaching out to its intended target audience by providing the very thing it knew they were looking for (even though they didn’t know what WAYN was yet).

Part of the difficulty it seems, with many web businesses, is that what they offer is a service no one thinks they need because they don’t know what it is.

Then, once they realise what the service is, and how useful it is, they begin to wonder what life can have been like without it.

So here’s a good answer to the question about how you attract people to your business when they don’t know what your service is, and when they can’t envisage what it will do for them:

Offer them something they need instead.

In WAYN’s case it was free international SMS texts.

Whether they needed WAYN or not, WAYN’s users definitely needed free international SMS texts. This, then, was the bait. Its what WAYN offered in its shop window knowing it would draw in people who would also like the service they were offering.

Now they’ve got to know what WAYN does, they realise they need it too.

WAYN.com recently changed its model from paid subscription to free (with VIP upgrade available), on the advice of Brent Hoberman, an investor in the business, and its current Chairman.

Like MVS and most Web 2.0 sites, WAYN’s growth is due in no small part to its use of automatic contact form signups. This is when you enter your username and password at the top email service providers and an email is sent to all your contacts inviting them to join too.

Sites vary on how they use this viral trigger and in Wayn’s case, the option not to use it is especially difficult to find.

A further point of interest, perhaps reflecting on the UK’s more relaxed Anti SPAM laws, is that no verification email is sent following signup.

Certainly a welcome message is sent, and an invitaion to download WAYN desktop – presumably a method of communication direct from WAYN without needing email -… but they never confirmed my email address to know that it is valid.

Perhaps we’re moving away from email contact – perhaps this is a sign of what is to come…

I’ll be interested to learn what delegates think of their impending position in the Internet Marketing community because it seems to me that Malaysia and Singapore are sitting on the mother of all gold mines in this industry.

Today’s newspapers spoke again of the impact on the world of increasing oil prices. For the third time in a generation, we are told, we are heading towards an oil crisis with global implications as the price per barrel teases the symbolic $100 mark.

But this time it is different. This time the price increase is driven by demand. Previously it has been caused by political pressure or constricted supply either in the Middle East, or Russia.

China’s consumption of oil has trebled since 1980. The current oil price, and potential increases in the future, are in correlation with the rise of the middle class in China and India as it steadily replaces mass poverty.

Look at these charts to see how oil consumption in China compares with Europe and the Americas:

And what else, aside of oil, do middle class consumers need?

Information… The Internet.

I believe the staggering increase in oil shown in China over the past 20 years is nothing compared to the forthcoming increase in Internet use in that country.

And when it comes to Internet Marketing, who in the world is best placed to teach them?

The cultural and language differences between China and the western world make it difficult for the main-stays of Internet Marketing to have a role in China’s growth. It seems more likely that it will come from her neighbours, in particular Malaysia and Singapore.

I’ll be speaking about this later today to the delegates of World Internet Summit Malaysia, and I will be interested to gather how prepared they are for their role in China’s Internet growth.