Lot's of ink has been spilled on these pages about Microsoft's (NASDAQ: MSFT) bid for Yahoo! (NASDAQ: YHOO) and what this might mean for Google (NASDAQ: GOOG) and for the entire search industry. See Gary Sattler's article on his views of how this may play out.

Tech guru, Tim O'Reilly takes a different tack on sizing up the news. On his blog, O'Reilly examines what this merger activity would mean for the whole e-mail industry, not search. "And for Microsoft, it could be a fatal mistake to take the battle to Google on its own ground. That's the very mistake that companies like Netscape made in competing with Microsoft," says O'Reilly.

Instead, posits O'Reilly, the combined Yahoo! and Microsoft should focus on their dominance in the e-mail industry. Yahoo Mail is still an industry leader online and Microsoft has huge assets in the corporate realm with Outlook and Exchange. Says O'Reilly, "Now think about all the possibilities that are starting to be explored in the area of e-mail data as a source of information about users, and a locus for building new services for those users."

This could get very interesting.

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author owns a long-term stock position in Google.