The newly inked but far off deal between Yahoo and Microsoft will no doubt change the Internet landscape, but only time will tell if it will be broad strokes or little details.

While any real idea of market shares and revenue are just speculation at this point, the deal puts Microsoft’s technology and Yahoo’s user base in direct competition with Google for first — though it’s a goliath first.

By most estimates, the newly carved Bing search share will hover around 30 Percent of the market, leaving Google with around 70 percent. Revenue estimates say the long-floundering Yahoo is set to reap about $250 million operating costs a year after the deal goes through — on top of the $200 million Yahoo saves on search engine technology and research.

Despite what looks like a big win for Yahoo, Ryan Singel, a blogger with Wired put Yahoo’s exit from the search stage bluntly.

By letting Microsoft take over its search engine, Yahoo has essentially announced it can’t keep up with Google and Microsoft and instead will focus on amusing users with multimedia deals and Fantasy Football leagues.

But he has a point, but it’s not as bad as it sounds, it’s letting Yahoo do what it does best. By basically announcing that it cannot keep up with Google, it lets the Internet portal focus on content aggregation and advertising — two things that it does better than search.

The deal will also showcase the technology behind the Bing search engine something Microsoft has the money and resources to keep running. The Microsoft branding will also make Bing/Yahoo advertising even attractive for advertisers looking to reach a wide market. It remains to be seen how advertisers will actually react to Bing, and if the engine is up to the task, but the slew of companies already featured on system is a good indication that they see potential in Bing.

Already, Bing users tend to click on more ads and convert better after clicking those ads than any other search engine. According to June 2009 data, Bing users click on ads 50 percent more than Google users. It’s not yet clear whether the “decision engine” is really working that well or if users traffic is already prepared to buy. If the former is true, then Microsoft software is pure genius (see Vista), or the massive Microsoft ad blitz is doing a good job of branding the site as a shopping destination.

Perhaps Windows 7 can keep that ad budget padded until the Yahoo-Bing deal actually goes through.

If users continue to turn to Bing as a shopping destination, it might bite into Google’s advertising revenue; despite the fact that Google would still have far more traffic.

The click-through rate shouldn’t, however, be used as a be-all-end all of traffic demographics. Because of Google’s reputation as a knowledge base, more users are searching things like “are zebras horses” (mostly) than “GE refrigerators.”

One interesting tactic Bing has deployed is the Bing Cashback system.

Big names are already featured on the Bing Cashback system — and if people get set on using Bing Cashback, it will further cut into Google’s profits. PayPal users already have the option of depositing the cash back in their accounts, so some Internet buyers have already adopted the standard and it has seen generous exposure on deal Web sites.

How Will It Change SEO?

There will be some changes to the SEO landscape, besides saying adios to Yahoo link data, the changes and radical market shift could mean SEO efforts will have to be targeted toward Bing and Google’s distinct algorithms to stay competitive.

Even if the lowest numbers are accurate, 15% of search market share is worth the optimization effort. Bing’s algorithm, while certainly an upgrade from Live.com still has a few noticeable preferences, such as concentration on keyword use in subdomains and root domain names (Google loves exact keyword matches, but Bing really likes any keyword placement in the sub or root). Bing’s core relevancy sometimes suffers from manipulative link patterns more so than Google & Yahoo!, though, they often do a good job surfacing alternative queries and instant answers.
– Rand Fishkins, of SEOmoz

In Fishkins’ article on the subject he brings up a very interesting point about the vulnerability of the Bing algorithm. Google’s extensive experience with spam has made it a decent shield against annoying search results, but how Bing reacts could be a bane or a boon to the engine. If all those users eager Yahoo users looking to buy can find is spam and scams, they will come right to Google and stay there.

How Bing deals with the eminent SEO overload that is likely already manifesting will be a key point before and after the Bing-Yahoo deal goes through.

For most legitimate search engine optimization companies, it means more split testing and some changes to keywords and link building to get to the top of the rankings. And there is a lot of incentive to get to the top and stay there early to get a good spot for when Bing absorbs 20-30 percent of the search market share.

Will The Deal Make It?

The FTC and the Justice Department will be combing over this deal for some time, but based on Google’s near monopoly on search already, there is little likelihood that the deal will turn sour. Google will likely fight the deal, possibly pushing it back even further, but in the end the two search giants will go head-to-head for users and advertising dollars.

Google’s technological response will be interesting to see, will the search leader rework its own search to make itself even more dominant? Will the search leader tweak and promote Google checkout? Or will Google just sit back and watch what Bing does?