One big story from a few weeks ago was Microsoft’s big offer to acquire Yahoo! in its bid to expand its power in the market of online services and advertising. Most notably, this would give them a big leg up in their battle against Google, their main competitor in this field.

Consider the situation prior to the possible deal. In this realm, Microsoft, Yahoo! and Google are three competitors, each fighting for a similar online market. Google provides email through GMail, and has the undisputed lead in both online advertising and search engine results. Microsoft has its own version of each of these through Hotmail, MSN Search and a smaller share in online advertising. Yahoo! also provides its own email and search engine service. They all also have smaller initiatives such as maps, online applications and utilities, and so on.

These three bodies can each be considered nodes in a three-way network. In the current sense, each has a negative relationship because they are all competing against each other for market space. These three negative edges is one form of the unbalanced network. Furthermore, these nodes could be considered “supernodes” as each body is slowly eating up each of the other smaller competitors in this market. For example, when Google acquired Doubleclick, one could consider a negative edge between them to become positive forming a bigger party. Yahoo!’s acquisition of del.icio.us and

Now consider what will happen if the deal goes through. Microsoft and Yahoo! will unite to form a gigantic new party, a “super-super-node” of sorts. The battle for online commerce will become even more polarized as Google will now have one other body, Microsoft and Yahoo! to compete against. Thus, all the smaller nodes within the supernodes of Yahoo! and Microsoft will become positive edges and remain negative edges towards all nodes in the Google supernode.

In short, the network of online marketing could undergo a major shift as Microsoft and Yahoo! could merge to make the network more balanced. There will be only two parties competing for services offered on the internet - Google (and all it’s smaller acquired groups) and Microsoft (with all of their smaller acquisitions plus Yahoo! and all of Yahoo!’s). This could lead to a big showdown in the world of online commerce.