If “Yacrosoft” – the unlovely name used by bloggers to refer to a potential $350 billion combination of Microsoft and Yahoo! – becomes a reality, the result would be an equally inelegant marriage, driven by necessity and not love.

The real broker behind a union of the world’s biggest software group and second-largest search engine would be Google. The runaway leader in search is decimating Yahoo!’s online advertising revenues and threatening Microsoft’s biggest cash cow – software licences – by rolling out free, web-based versions of stalwart products such as Word and Excel.

The bankers no doubt encouraging a tie-up will argue that the combined bulk of Yahoo! and MSN, Microsoft’s web division, is the only realistic counter to Google’s dominance online. The merged group would have about 33 per cent of the search market – still lagging behind Google’s 50 per cent. But it could surge ahead of Google in terms of the eyeballs attracted to its sites. In the UK, Google leads with 30 million users a month, but Yahoo! and Microsoft, with about 27 million each, are within striking distance.

The trick is converting those visitors into cash – through online advertising and by selling services to them. Wall Street’s rainmakers will be hoping that a marriage of Microsoft money – it is sitting on a $30 billion cash pile – and Yahoo!’s recently revamped ad technology can expedite that process.

Doubts abound, however, on whether the two companies would gel.

When Yahoo! was created by Jerry Yang and David Filo in 1994, Microsoft was already 21 years old and the largest software developer in the world.

Both based on the US West Coast, but still worlds apart, the potential culture clash is enormous. Indeed, the propect of a takeover has led industry insiders to refer to the disastrous merger of AOL and Time Warner.

It is not hard to see why. Microsoft, with headquarters in sedate Seattle and co-founded by Bill Gates, is the grand old man of the technology sector.

By contrast, California-based Yahoo!, which started life as “Jerry’s Guide to the World Wide Web”, a directory of other websites, chose the name Yahoo! because its founders liked the definition of the word they found in Jonathan Swift’s Gulliver’s Travels: “rude, unsophisticated, uncouth”.

Indeed, eager to retain his young Turk credentials, Mr Yang is said actively to dislike Microsoft products, and to go out of his way to avoid using them.

Such personal prejudices may fall aside in the wake of Google’s $3.1 billion acquisition last month of DoubleClick, the largest broker of “banner” ads on the web.

If completed, the deal will see Google pile into an area regarded as a Yahoo! stronghold – display ads. The timing could not have been worse for Tery Semel, the Yahoo! chief executive. Yahoo! wanted DoubleClick. Damagingly, its failure to seal a deal coincided with Mr Semel’s poor handling of dismal earnings news.

At a meeting with analysts following an 11 per cent drop in quarterly profits, he left other executives to explain what went wrong. The company’s shares plunged 9 per cent, wiping $4 billion (£2 billion) off its market value, even as Mr Semel was ducking tough questions.

The squeeze on the former Warner Brothers veteran worsened when Google unveiled profits for the same quarter of $1 billion.

Microsoft, which is still railing against the DoubleClick deal on competition grounds, also has cause to feel vexed. It is thought to have matched Google’s DoubleClick bid, only to have been rebuffed by Hellman & Friedman, the private equity house that put the company on the block.

Coming on the heels of Google’s $1.6 billion acquisition last year of YouTube, the video-sharing site, the DoubleClick debacle looks to have roused Microsoft, a famously unwieldy group, to something approaching urgency – the nuclear option would be a $55 billion Yahoo! takeover, an idea it dallied with last year.

Microsoft would negotiate from a position of relative strength. Last week, it released figures that appeared to vindicate its $5 billion investment in Vista, the latest version of Windows. Quarterly profits jumped 65 per cent to $5 billion, compared with the same period a year earlier, beating Wall Street’s expectations on strong sales of the software system.

The figures buoyed Microsoft shares, but few in the group’s headquarters will be resting easy. Ray Ozzie, the man who will replace Mr Gates as Microsoft’s chief software architect (the group’s strategic brain) as the world’s richest man drops out of the day-to-day running of the group over the next year or so, has already laid out the implications of Google’s rise in stark terms.

“Through Google’s focus they’ve gained a tremendously strong position,” he told employees in an internal memo last year. “[Microsoft] must respond quickly and decisively . . . It’s clear that if we fail to do so, our business as we know it is at risk.”

The key target for Microsoft, were it to swoop, would be Panama, the new online advertising platform that Yahoo! has been trumpeting as the antidote to Google’s dominance.

However, onlookers have raised questions on whether bolting Panama onto the $300 billion behemoth that is Microsoft would create a group too unwieldy to compete in a fast-changing internet landscape – a pertinent point given Mr Ozzie’s admiration for Google’s “focus” on search.

“Would it be a smart strategic move for Microsoft and Yahoo to combine forces? Absolutely,” says Henry Blodget of the Internetoutsider site. “Is the best way to do this to have Microsoft suck Google into the massive Windows/Office empire? Absolutely not.”

According to Mr Blodget, if Microsoft were to swallow Yahoo!, it should “immediately spin the Yahoo-MSN [internet search and online advertising] business out as a separate company. If it doesn’t, both Yahoo and MSN will die.”

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