A joke of a headline of course, but it I think it accurately captures the miserable state of things at MSN with the Live Search product. I just got my latest Hitwise monthly newsletter in my inbox a few minutes ago and it highlights just how bad things are going over in Redmond.

Here is the sobering data for Live.com product and marketing execs. Year over year search share for the month of April has slipped from 8.46% in '07 to a shocking 6.26% in '08. A whopping 26% decrease in market share in the past year. Yahoo, Microsoft's on again off again acquisition target? They only slipped 2.2% in the same period. Unsurprisingly Google has swallowed up most of these fleeing percentage points on their way to a nearly 68% market share. However, lowly Ask.com posted strong gains both year over year going from 3.69% in April of '07 to 4.17% in'08.

So, how is Microsoft combating this glaring issue? With gimmicks of course. Live.com is now the search engine that pays you back for your online purchases. In essence, MSN is vying to position itself as the worlds largest incentive based affiliate. Heady times these. You know you are going out on a limb when your home town tech columnist is already lampooning your efforts.

How is it that a company with $50+ billion in cash has to resort to paying people to use its search engine? This is something that a hungry start-up would attempt as a marketing ploy to drive visitors to their new search technology. It has never been more clear why Microsoft so desperately wants to buy Yahoo.

Today, not only did I realize we have been terrible about posting to our blog lately, but more critically, that this Microsoft and Yahoo acquistion/merger/partnership story is well over a year old.

Ichan haz Microsoft? We can only hope.

The latest rumors flitting about the news sites and blogs are that Microsoft is interested in taking a baby step and acquiring Yahoo's search business. This interesting tidbit comes on the heals of news that Yahoo has been exploring outsourcing of its paid search business to Google.

Obviously, Yahoo outsourcing their search advertising to Google would immediately kill any potential deal with Microsoft. Ballmer needs that search business...bad. So, one has to wonder if this isn't just a Jerry Yang special aimed at bring Microsoft back to the bargaining table with a boosted bid.

It hardly seems to make sense that Yahoo would outsource their search advertising business to Google considering the investments they have made in the Panama platform in recent years. Yahoo's problem isn't the Panama architecture, it is their traffic quality. Put simply, Yahoo needs more higher quality traffic. I just don't see how Yahoo could expect to be in a superior financial situation by outsourcing search advertising to Google. They could obviously save a bundle by laying off the myriad of folks in engineering, sales and support at YSM, but this would be a short-term gain at best.

And now we have Microsoft apparently interested in 'dating' Yahoo by purchasing YSM. Panama is a superior platform to Adcenter in most respects, but it certainly isn't on par with Adwords from either a usability of efficiency standpoint. And what exactly would Microsoft be buying? YSM in its entirety, including running search advertising on Yahoo's web properties? Would they be foolish enough to purchase only the Panama platform leaving Yahoo still able to outsource the search advertising on their properties to Google?

Regardless of all of this speculation, two things are for certain when and if something happens here. 1). There are going to be a lot of lay-offs at MSN and Yahoo. 2). Google will not lose any sleep.