The PPC advertising industry is constantly evolving, and the coming days or weeks will likely substantially modify the landscape as we know it. Microsoft recently swooped in and offered to buy Yahoo! for about $47 billion, which was greater than a 50% premium to what Yahoo!’s stock value was at the time. Yahoo! co-founder & CEO Jerry Yang killed the deal, demanding even more money to make it happen. Microsoft walked away.

PPC AdvertisingThe reality is, Microsoft really could benefit from Yahoo!’s 500 million+ worldwide users. That is a lot of users. Microsoft knows they need to do something drastic to compete with Google’s enormous, and constantly growing search query dominance. According to ComScore, Google again increased its leadership position in April, capturing 62% of all U.S. search queries – roughly 6.5 billion searches. 20% were performed at Yahoo! and 9% at Microsoft Sites.

Last week, Microsoft launched an initiative to reward their searchers with cash back if they buy something online. This may prove successful, but is not likely going to provide the answer Microsoft is looking for. So, has Microsoft really walked away from the Yahoo! deal?

To add to the current mix, in walks billionaire Carl Icahn. This guy has an impressive track record, and just picked up 50 million shares of Yahoo! He intends to wage a proxy battle to fire the current Yahoo! board and get the Microsoft deal completed.

Yahoo! argues that the buyout may not be in their best interest and that they are considering a partnership to run Google’s PPC ads alongside Yahoo! content. Testing has been completed and both parties are excited. Yahoo! can potentially earn far larger income from Google’s ads and save a small fortune on running their own PPC platform. Hmmm.

So how will this all play out? Time will tell, and likely soon. I am thinking Microsoft ends up buying Yahoo!. It would certainly be nice to see Yahoo’s new and improved platform replace the current Microsoft adCenter platform. Microsoft no doubt spent substantial time and effort in determining that they wanted to buy Yahoo!. I suspect that will still be the end result. Plus, it does not seem wise to bet against Carl Icahn. One thing is for sure; change is on the way.