If a deal was signed it’d be interesting to know the terms.

Facebook is going to win the “real identity” game and with it, the pole position for delivering demand-creation ads (as opposed to search’s demand-satisfaction ads) more efficiently.

I do think, however, that there is space for Yahoo! in the world you describe. Bing delivers demand-satisfaction revenue to Yahoo via search, and Facebook delivers demand-creation ad revenue with better targeted brand/display ads. Yahoo sits in the middle and integrates these search and social experiences along with its own media properties and ad selling into a package for a large subset of the world’s internet users. Given its (still) massive reach, Yahoo commands very high shares I’m sure, and in the meantime keeps its capex low… making it a very efficient business.

While it’s not a perfect analogy, I can’t help but think of the PC market. Intel and Microsoft have historically extracted the lion’s share of profits from the PC market, yet Dell has operated a very nice business for a good long time by (essentially) efficiently intelligently integrating Intel and Microsoft. And Dell has the option to swap out its parts if a better option comes along.

I don’t disagree on the trend, but I think Yahoo deal gives FB Connect a rocket-style boost. It takes them closer to their goal much much faster.

I am surprised that not many are realizing the importance of this deal — it is a company defining deal and Yahoo is going to live to regret it.

Facebook is slowly going to suck the life out of Yahoo via access to the contact list. :-)

The Yahoo! deal is significant, but FB becoming the king of online identity was gonna happen anyway.

I would also add that another big loser to FB connect is OpenID.

Ceding identity to Facebook accelerates Yahoo’s demise. Yahoo’s perennial core competency is selling branding advertising to a massive, unique audience viewing high quality content. By correlating a Yahoo ID to a Facebook ID, Yahoo more than cedes identity: they cede exclusive knowledge and access to hundreds of millions of users, billions of impressions and tens of billions of dollars in revenue to Facebook.

Facebook will know all that Yahoo knows about their users. Facebook will have a larger audience, a better ad targeting platform and eventually more advertising market share than Yahoo.

In short, Om is right: this move is disastrous for Yahoo and a coup for Facebook.

http://expostfacto.posterous.com/the-scorecard-winners-and-losers-of-yahoo-fac

Yahoo continues its course of defining itself as a media property and less as a search and social network. They have an uphill struggle. The technology factor is greatly diminished as stated in this post.

Google has never been a social network. They continue to be an search, advertising, and applications service. Technology is Google’s sweet spot and justifiably so.

AOL faces a long battle against Yahoo and MSN and all the other media properties to attract users/viewers and advertisers.

My thoughts.