Net Giants Mull the Mating Game

All the pieces are falling into place; now it's just a matter of time before the fun begins and Internet brand names start consolidating.

Not consolidation as in big companies picking through the dozens of YouTube and MySpace knockoffs as a cheap way to get a foothold in a popular emerging technology.

But consolidation as in the mega-mergers that have swept through so many other industries, from banking and securities to entertainment and consumer goods. While many of those industries took decades to mature into industries where mergers made sense, the hypergrowth Internet industry is reaching it more quickly, just as many Internet companies grew nearly overnight into multibillion dollar enterprises.

Think of the classic reasons behind most mergers and acquisitions: Economies of scale? Check. Giants like Google , Microsoft and Amazon.com are all spending money on the same costly initiatives, like vast farms of servers to store digital data. And they are constantly fighting tooth-and-nail over the same engineering and marketing talent.

Synergy? Check. Over the past few years, it's nearly impossible not to notice how the distinct markets of Internet giants have bled into each other. Google elbows onto eBay's PayPal turf. Search becomes a central part of how Yahoo! organizes content. Microsoft sticks its tentacles into every single niche it can find.

Increased revenue and market share? Check.

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