Its a very interesting proposition, however i suspect if the two companies (search engines) did merge i suspect that they probably trade under either both names (ie keeping the two search engines independant) or trade under one name.
A similar thing happened in the property industry a few years back.
a)
www.assertahomes.comb)
www.propertyfinder.comSince the merger they now trade under
www.propertyfinder.comI think if MSN / Yahoo changed to trade under a new brand, i suspect that they might lose a fair amount of goodwill and value associated with their respective brands.
I suspect again, that if a merger did go ahead, Yahoo would be the better, more brandable name and allow MSN / Live to distance themselves slightly from the Microsoft brand.
