Why Microsoft Really Needs Yahoo!

The real benefit from the carefully-watched potential Microsoft-Yahoo! merger would be for mobile search. Microsoft’s Mobile Windows is on a vast number of handsets while Yahoo! has worked with carriers to put Web-friendly content and utilities into phone software. Thus the merger could mean a bigger mobile presence for both companies, as Current Analysis analyst Avi Greengart told Forbes: “If you’re looking for where a tie-up could occur, that’s one place.”

Several reports indicate mobile search is becoming the hot new space–for investors, tech behemoths, and consumers alike. A good example is company NearbyNow whose service lets shoppers reserve products online and sends confirmations, coupons, and other deals to shoppers’ cell phones–has announced it secured $11.75 million in a third round of funding. Some 200 malls nationwide already offer NearbyNow service to their customers.

More importantly, the startup is rolling out an iPhone-specific application that lets users navigate through an onscreen mall and search a particular store’s inventory and special sales. The iPhone app also lets retailers send out enhanced ads, in addition to the SMS ads that they can already broadcast.