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Internet link love proves more powerful than old-school politics in the 2008 election, thanks in part to a visionary social networking election strategy. In today’s link building column, “Obama’s Link Strategy Fuels Election Victory,” Sage Lewis looks at what we can learn about online marketing from studying presidential politics.

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Washington is on a bailout binge lately, so you would think they’d hop on board when it looks like the private sector could actually manage to work things out on their own.

Like, I don’t know, the search advertising deal between Google and Yahoo. Yes, there are concerns from the advertisers. But Yahoo keeps posting dismal profits. So, unless something magical happens to Yahoo (like an acquisition by Microsoft - oh wait), then antitrust issues won’t even matter.

But Google has been dropping hints that it might walk away from the deal because of regulations they don’t want to comply with, like caps.

It’s been projected that the deal with Google could infuse $800 million of cold hard cash into Yahoo in a year’s time. That certainly wouldn’t hurt. Of course, Yahoo would need to manage that influx well, and therein lies the problem. Perhaps regulators don’t think the deal, which could hurt advertisers, would ultimately save Yahoo.

Adding fuel to that fire is that regulators have been lobbied hard by Microsoft, who is probably looking to watch Yahoo’s stock fall into the single digits before coming back to pick it up. Microsoft may be struggling to grow its search market share, but as a whole, they have a ton of cash on hand and will weather the economic storm. Acquiring Yahoo (especially if a merger with AOL takes place) could create a stronger second place finisher in the search engine market, which would reduce anti-competitive concerns, indeed.

We know that searchers want answers, and there are plenty of answer sites out there to fuel their curiosity. Now, Microsoft’s Live Search team is including some answers in their search results.

Encyclopedia, Traffic and Horoscope information will now display answers within results. For example, you can type in the question “How tall is Mount Everest?” and get the answer in the results.

I think search marketers will be happy about this. If you’re trying to sell a product, it can be frustrating when people come to your site who have no intention of buying anything.

The Live Search team says even more answers will be included in the future.

What do you think about the update? Let us know in the comments.

As October approaches, and Google prepares to implement its advertising deal with Yahoo, more and more commentary is flowing about the pros and cons of the deal.

The New York Times is saying there’s nothing to worry about. But their argument is mostly full of talking points released by Google itself last week. (Their talking points were not bad, mind you.)

Meanwhile, TechCrunch is so afraid of the deal, I’m thinking the makers of Xanax must be making a huge profit off of their anxiety alone.

Fears of price-setting do seem to be misunderstood, and the timing might only fuel those fears. Advertisers are flocking to the web in large numbers. In an unstable economy, they do so even more because search advertising is still a great deal over some traditional forms of advertising. With demand and competition higher, prices could increase. So the timing of this deal may affect how people view the prices, even though those traditional forms of advertising are a form of competition.

Still, people want competition in search.

Personally, when it comes to monopolies, I think of Microsoft (not for their search, of course). They’ve had so much of the operating system market for a long time. But in recent years, Apple has come along to snag some of that market share away.

This had nothing to do with regulation, but instead innovation. That innovation is based on how people want to work and what they want to do with their computers. There are other operating systems, but there are reasons why they don’t appeal to the masses. It’s the same in the search industry.

There’s a reason Google has so much of the market share. It’s because their search and Adwords program are what people want. In the future, I suspect the tides will shift. After all, how many times do you really find what you’re looking for on the first search? And how many times have we heard complaints about Adwords?

But no one else has anything better - at the moment. However, perhaps letting Google dominate will be the very thing that drives innovation.

There’s enough to dislike about Google to desire something better. And some genius, perhaps in a dorm room or working passionately late nights on a project after work, will come up with it.

But preventing a Google-Yahoo deal won’t make that happen any sooner. Regulation in this matter will not spur innovation. Regulation will not keep prices down. Google already has too much of a market share, and hardly anyone views Yahoo as a real competitor anyway.

Oddly enough, if Yahoo were to ever become a stronger competitor, it could result largely from the increase in income generated by this deal. More revenue would provide more money to fund research into search. This, of course, can only be facilitated by a good business model and the right focus at Yahoo. And for this, we can only hope that Carl Icahn continues to give Yahoo a much needed kick in the butt.

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Yahoo is planning an overhaul of their homepage design, and will open up to third party developers. The design will incorporate widgets, and Yahoo Music will open up to iTunes and Amazon.

This continues a pattern of Yahoo opening up various products and services to third party developers. Earlier this year, Yahoo launched SearchMonkey, which lets developers manipulate how search results are displayed within Yahoo and later BOSS (Build your Own Search Service), which allows people to use Yahoo technology to fuel custom search sites.

The news wasn’t enough to impress Wall Street analysts. Jeffries & Co. lowered their target stock price for Yahoo to $26 from $28. The stock was at $19.07 at the time of this post.

Rumors of a “Google Operating System” have been around for a few years now, fueled by Google’s expansion into e-mail, analytics, desktop search, Web applications, pizza delivery…well, maybe not that.

Today, Google has made a significant step toward becoming a Web-based operating system by launching a beta version of the open-source Google Chrome browser, which has been optimized to run Web applications rather than simply rendering HTML on a page.

“All of us at Google spend much of our time working inside a browser. We search, chat, email and collaborate in a browser. And in our spare time, we shop, bank, read news and keep in touch with friends — all using a browser. Because we spend so much time online, we began seriously thinking about what kind of browser could exist if we started from scratch and built on the best elements out there. We realized that the web had evolved from mainly simple text pages to rich, interactive applications and that we needed to completely rethink the browser. What we really needed was not just a browser, but also a modern platform for web pages and applications, and that’s what we set out to build.”

Chrome’s main features include a beefed-up Javascript engine (aka V8), which will improve performance of AJAX apps like Gmail and Google Docs. It also offers better memory allocation, and an architecture that keeps apps running in separate windows as isolated processes — so a crashed app won’t bring down the browser, and security is markedly improved.

The browser includes its own URL box, which Google is calling the “Omnibox.” It incorporates features from Google Suggest, browser history and search history.

As with the Google Toolbar before it, Chrome will also present an opportunity for Google to collect more user behavioral data. On the plus side, that could help Google develop better Web analytics applications. More cynically, Google can also take this mountain of user data and use it to better monetize its ad platforms.

While this move can be seen as a challenge to Microsoft on the browser front, it’s more of a threat to Microsoft’s Windows operating system. By developing its own open-source browser, Google is able to establish de-facto standards for Web applications.

Combined with Google Gears coming at Web applications from the developer side, and there’s not much use for a desktop operating system any more.

Last week the Senate Commerce Committee held a hearing on online advertising and privacy. Today, the Judiciary Committees of the Senate and House get in on the action as it relates to the recent Yahoo-Google deal.

The Senate hearing began at 10:30 am, but is largely eclipsed by a speech by the President as well as Fed Chairman Ben Bernanke’s umteenth appearance on Capitol Hill. You can watch it live by clicking on “Live Webcast” here.

The House hearing begins at 1:30pm and the site has links to webcast video, though I personally couldn’t get them to work on my laptop. If you’re in the DC area, head on over to 2141 Rayburn House Office Building to observe the hearing for yourself.

Google Senior VP for Corporate Development and Chief Legal Officer David Drummond will be appearing at both hearings and is planning to touch on the following:

• The agreement will be good for Internet users (who will see ads that are better targeted to their interests); advertisers (whose ads will be better matched to users’ interests, allowing them to reach potential customers more efficiently), and website publishers (who will see increased revenue from better-matched ads on their websites).
• Google and Yahoo! will remain vigorous competitors, and that competition will help fuel innovation that is good for users and the economy. Commercial arrangements between competitors are commonplace in many industries. Antitrust regulators in the US have recognized that consumers can benefit form these arrangements, especially when one company has technical expertise that enables another company to improve the quality of its products
• The agreement will not increase Google’s share of search traffic, because Yahoo will continue to run its own search engine and compete in online search.
• Yahoo! will make its instant messaging network interoperable with Google’s. This will mean easier and broader communication among a growing number of IM users, and enable users to choose among competing IM providers based on the merits and features of the services.
• A number of steps have been taken in the Yahoo! agreement to protect user privacy. As Google supplies ads to Yahoo! and its partners, personally identifiable information of individual Internet users will not be shared between the companies. Yahoo! will anonymize the IP address of a searcher’s computer before passing a search request to Google.

Also scheduled to appear are:

• Michael Callahan, General Counsel, Yahoo!
• Brad Smith Senior Vice President and General Counsel, Microsoft
• Matthew Crowley, Chief Marketing Officer, Yellowpages.com
• Tim Carter, President and CEO, Askthebuilder.com

In the wake of Carl Icahn’s declaration that Microsoft would buy a Yahoo run be a different board (and Microsoft’s affirmation of the claim), Google CEO Eric Schmidt hasn’t changed his position on what should happen with Yahoo. Speaking to reporters in Idaho yesterday, he reiterated that he believes an Independent Yahoo is best for the industry.

Schmidt called Microsoft’s bid for Yahoo “anti-competitive,” something Google has been saying from the beginning. He also said that the Redmond-based software giant has a history of being anti-competitive, and that’s evidence enough of their intentions with acquiring Yahoo.

Of course, Google is facing its own anti-competitive issues with its recently announced search advertising deal with Yahoo. Despite the partnership being non-exclusive, the Justice Department formally opened their antitrust investigation into the matter earlier this month.

Still, it’s no doubt that the search ad deal fuels Schmidt’s desire for Yahoo to remain independent. That and a Microhoo would mean a stronger second place competitor in the search ad marketplace. Though, most would agree that second place is definitely first loser in a Google-dominated search industry.