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: In most industries, a merger of two major companies would cause everyone else to panic over a decline in competition.

But in the case of the online advertising market, advertising and media executives said that they liked the prospect of a combined Microsoft and Yahoo. Google, they said, has become so dominant in its grip over the online audience that the merger might be the only way to produce a competitor strong enough to face off with it.

“It’s so reductive to say ‘Google is evil’ or ‘Google owns everyone’,” said Sarah Chubb, president of CondeNet, the digital arm of Conde Nast. “But what it comes down to is, competition is good for everyone in the marketplace.”

And competition, Chubb and other executives said, would surely be increased if Google’s foes bulk up. Despite more than a year of courting advertisers and media companies, Microsoft continues to lag Google in online ad sales and in its share of the consumer search market. Yahoo, once a prime competitor to Google, has been slipping since the departure last summer of several ad sales executives who had deep relationships with ad agencies, the executives said.

Google, on the other hand, continues to expand its ad revenues at rates nearing 30% a year, and it owns the sites with the most total worldwide traffic. Google also received good news last month when the Federal Trade Commission cleared its merger with DoubleClick. That company delivers display advertisements for websites and has deep relationships with many media companies. (Google is still waiting for clearance from the European Commission.)

Many people in traditional media companies and ad agencies had started thinking that Google had simply won the battle. Just two weeks ago, the Publicis Groupe announced that it had been working closely with Google to develop advertising technologies—becoming the first player in traditional advertising to publicly embrace Google.

Other ad executives have been more cautious in their involvement with Google. Martin Sorrell, chief of WPP Group, another advertising conglomerate, labeled Google the “frenemy” in 2006.

A WPP Group executive said that Microsoft’s $44.6 billion bid for Yahoo was great news. “It has to be good to have more than one strong company,” said Mark Read, director of strategy for the company, which owns ad agencies like JWT and Ogilvy & Mather. “It’s good for investment. It’s good for competition.”

A combined Microsoft and Yahoo would beat Google in Web traffic and come closer in ad revenues. Most importantly, the pair would give Google a greater challenge as it tried to enter display advertising, because Yahoo has the largest share of that market.