Those of you who have been interested in blogs for several years are probably well aware of the company Technorati. This website made a splash by becoming the first market-share dominator in the entire Web 2.0 space, especially in the blog search engine space. But times have changed and Technorati is struggling to hold on.

The situation in Technorati is quickly shifting to more difficult, seemingly by the day. As TheDeal.com reported on Friday, the founding CEO of the company recently stepped down. In addition, the company has been forced to recently slash eight jobs to adjust the company's expense structure. Perhaps the most startling of it all -- Technorati is quickly losing its dominant market share position.

According to research firm Hitwise, Technorati's number one market share position is now just secured by 1%. The company currently stands at 34% of the blog search market, while Google's blog search product is a strong and growing 33%.

As you can see from the chart below (courtesy of Alexa.com), Technorati's page views figures are well off of their peak. Understandably, this traffic decline has been a huge catalyst to a weakening position in the blog search market, as well as financial difficulties, because for most internet companies, traffic is everything.

Privately-held Technorati is a leader in aggregating blogs. In fact, the company tracks more than 72 million blogs and somehow has held its own against players like Google inc. (NASDAQ: GOOG).

Now Technorati is trying to leverage its massive platform with acquisitions. The company today announced the purchase of Personal Bee for an undisclosed amount.

Like other New Age web sites, Personal Bee has a funky vibe. For example, it calls its users "beekeepers." It's a useful service in which the beekeepers can keep track of the news they want to see and build personal sites around this.

As for Technorati, the acquisition is a way to provide more tools for its users (I'm not sure if they are referred to as "technoratians"). But it's more than just fun and games. That is, Technorati sees this as a way for advertisers to create their own communities.

It's an intriguing idea and advertisers certainly realize they need to better leverage on the blogosphere. By using a service like Technorati, they can do it without the risks of placing ads on edgy or controversial sites. As validation, the company has the support of marketing powerhouse, Ogilvy and Mather.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Silicon Valley blog TechCrunch says that the management of Technorati, the largest blog search engine, is becoming very liberal about sharing its unique visitor and page view numbers. The company is privately held, so the information would usually be kept confidential.

Technorati has been in competition with Googlen Inc.'s (NASDAQ: GOOG) blog search property, a natural extension of its huge blog creation site Blogger.

According to Technorati's numbers, it has over nine million unique visitors a month. That would make it more than half the size of Photobucket or Facebook, both Top 50 sites according to comScore. It would also make the company valuable to Google, which, with 114 million unique visitors in February, still trails Yahoo! Inc. (NASDAQ: YHOO) at almost 129 million.

With Blogger already a large traffic driver for Google, owning the largest blog search property would clearly be a good fit.

No good banker would let Technorati go without other bids, if, indeed, it is for sale. That means that at the very least, Microsoft Corp. (NASDAQ: MSFT) would have to look at it to strengthen its Live Search and MSN audiences. Yahoo! obviously would not want to be left out.

There are not many internet properties for sale that have nearly 10 million unique monthly visitors, so the interest in Technorati should be intense.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Blogger David Berlind was browsing around in Technorati and found a strange error. He checked again, just to be sure, but it appeared that his Technorati error was causing a Yahoo! 404 Not Found message. He wonders if Yahoo! has acquired the leading blog search engine.

If the buzz is true, it will prove TechCrunch's Michael Arrington (and Red Herring's Liz Gannes, who quoted him) to be one heck of a prognosticator. Back in January, he asked, "When Will Yahoo! Acquire Technorati?" and noted that Technorati CEO Dave Sifry had declined to comment on the speculation.

"No Comment" has never been proof of anything, but strange errors may be at least evidence enough to start the rumor mills churning. Interestingly, both Technorati and Yahoo! are spending a lot of time this week talking video; Technorati struck a deal with Paramount to help create buzz about new movies, and Yahoo! previewed its new home page with (of all things) video right there front and center.

Yahoo! was solidly up in trading today, 53 cents, to $29.53, and has soared in after hours -- up over 4% since yesterday's close. Everybody loves a rumor.