Microsoft Corp. (NASDAQ: MSFT) continues to dominate the news nearly a week after announcing its $44 billion bid for internet rival Yahoo! Inc. (NASDAQ: YHOO). Analysts are still deciphering the reasons why the world's largest software company wants to pay such a premium for an ailing -- but still powerful -- internet brand. The prevailing wisdom is that the growing power of Google Inc. (NASDAQ: GOOG) has finally forced Microsoft's hand here. To a point, that's very much true.

But the future of the web may not be fought on the laptop screen nearest you, but instead on the mobile screen that goes everywhere in your pocket. With that "internet everywhere" mentality that's still not a huge reality for millions of consumers, mobile advertising beckons as a huge revenue stream.

Tapping into that may be a large reason why Microsoft wants to merge with Yahoo!, according to Gartner analyst Philip Redman. "Leadership in mobile advertising is still unclaimed, while Google is threatening to do there what it did on the internet, so Microsoft is being preemptive."

Is mobile advertising the next coming of the internet? Many industry watchers and analysts believe so, although most phones absolutely stink as portable internet access terminals. The Apple Inc. (NASDAQ: AAPL) iPhone has been the game-changer; it was made for the internet. Well, if you can see past that poky-slow wireless cellular connection that you probably have. Analyst Jeff Kagan said that "Yahoo touches so many customers and there's so much advertising potential in this deal . . . It's the kind of world Microsoft loves."

Disclosure: the author holds a long position in MSFT.

Microsoft (NASDAQ: MSFT) says it has launched mobile advertising on its MSN Mobile portal optimized for viewing on smartphone and cellphone screens. It's about time -- mobile advertising, as many industry pundits has said for years, is the next frontier of online advertising. Competitor Google (NASDAQ: GOOG) is right there as well, and company CEO Eric Schmidt never misses a chance to say how important mobile web access is to global internet users.

MSN Mobile will now feature miniature banner ads suited specifically for each web browser type and screen size resolution based on the type of device each mobile customer uses to visit MSN Mobile. Microsoft services like Hotmail, MSN Messenger, Live Search and others are all available on the portal. The question is whether customers will use them in increasing fashion. When it comes to mobile web access, Microsoft definitely does not enjoy the monopoly it holds with its desktop software and operating system presence.

But there is more -- MSN Mobile allows movie ticket purchasing, and the downloading of background images and ringtones for any customer who visits. With ad backers Bank of America, Paramount Pictures, and Jaguar, MSN Mobile has some decent partners lined up to begin with. That, of course, does not guarantee success. Google's mobile ad efforts are proceeding along at lightning speed too.