Microsoft's Yahoo bid is over, but the aftermath might prove just as interesting. And it looks like Google could play a significant role.

During its tussle with Microsoft, Yahoo tested a search-related advertising alliance with Google in an attempt to boost its profits and fend off Microsoft's unsolicited offer. Under the arrangement, ads from Google's lucrative system were delivered alongside Yahoo search results.

Microsoft, itself no stranger to antitrust problems, objected to even the hint of a more permanent deal -- saying that such an agreement would "consolidate over 90% of the search advertising market in Google's hands," and adding that it would assess its options closely.

The test has since ended, but a longer-term Google-Yahoo partnership remains a possibility, even after Microsoft dropped its bid. Speaking with reporters today prior to Google's annual meeting, the company's executives defended the possible partnership. According to this CNet News.com post, Google co-founder Sergey Brin suggested that those with antitrust objections weren't defining the market broadly enough: "You are narrowly focused on search advertising," he said. "Advertising as a whole is much broader, and Internet advertising is much broader."

Is that how antitrust regulators would see it? Microsoft might take solace in this passage from the Federal Trade Commission's approval of Google's DoubleClick deal (PDF, 13 pages, emphasis added below):

It has been suggested that the transaction would eliminate competition between Google and DoubleClick in an "all online advertising" market that would include search advertising, ads sold through intermediaries, and directly sold ad inventory. The evidence, however, indicates that all online advertising does not constitute a relevant antitrust market. Advertisers purchase different types of ad inventory for different purposes, and one type does not significantly constrain the pricing of another. For instance, advertisers primarily purchase search advertising space to implement direct response ad campaigns, while directly sold ad inventory is generally purchased for brand advertising campaigns.

The FTC pointed out that Google is "the dominant provider of sponsored search advertising," and it concluded its DoubleClick ruling with a cautionary note: "We want to be clear ... that we will closely watch these markets and, should Google engage in unlawful tying or other anticompetitive conduct, the Commission intends to act quickly."

However, Google and Yahoo have reportedly been thinking about addressing antitrust concerns by creating a non-exclusive, auction-style setup that would let other advertising platforms, including Microsoft's system, compete to put ads next to Yahoo search results, too.

From the coverage out of Mountain View today, it appears that Google's executives didn't talk explicitly about that possibility. However, the Associated Press quotes Google CEO Eric Schmidt saying, "If there were a deal (with Yahoo), we would anticipate structuring the deal to address the antitrust concerns that have been widely discussed."

Microsoft declined to comment today beyond the company's previous statements on the subject. But this probably won't be the last we hear about this issue. CNet's report quotes an anonymous source saying that an announcement is expected next week.