What does the Microsoft-Yahoo mashup mean for your business?

Immediately? Nothing.

Longer-term? Still probably nothing. But possibly quite a bit more. Social search is supposedly the next frontier. Jeremiah Owyang notes today that social is tough to monetize, but I’m betting some folks will figure out how to do it.

For example, Google launched its profile product about a month ago, with little fanfare, but it’s clear the search leader aims to gain detailed demographic information both to aid search (“help me find this person”) and to help advertisers (“help me find this customer”). What few seem to mention is the vast customer database Microsoft and Yahoo will share as the largest single email provider on the web (Time Magazine reports [Feb 18, 2008] Micro-Hoo would have 426 million users worldwide compared with 90 million for Gmail). If Microsoft and Yahoo could power an Answers-like social recommendation search using what they’ve learned from their failed algorithmic search and more successful enterprises like Flickr and del.icio.us, they just might be onto something. Twitter does a great job of answering the types of search queries social search should excel at, in this case finding a song title from a partial – and incorrect – lyric. Doug Sherrets from VentureBeat and I compared notes a couple weeks back about this topic. I think that the most likely winner in social search is someone we’ve never heard of yet, especially if Micro-Hoo takes a year or two to integrate. But, if they can manage this feat, they’ve got a large community of users and great scale to ensure profits overall, even if individual clickthrough remains low.

So, what action do you need to take to grow your business? For now, none. If you’re doing paid search marketing – and if not, why not? – you still should allocate your spend according to where you’re getting results. Yahoo’s rejection of Microsoft’s overtures this morning, while probably a play for more cash, is all the more reason to ignore it for now. In the longer term, however, if social search catches on, don’t be surprised if the combined Microsoft-Yahoo behemoth gives access to the most – and best – customers.