In these volatile times, not many companies are willing to launch hostile bids for others and even fewer will back their hunch with $44bn. So Microsoft deserves the thanks of idle investment bankers and a nod from the rest of us.

Microsoft's bid for Yahoo is partly a piece of opportunism. Yahoo's shares fell as investors lost faith that Jerry Yang, its co-founder, could sort out the problems left by Terry Semel, its former chairman and chief executive. It is not exactly going cheap but it is certainly going cheaper.

But for Microsoft to make a return on its $44bn, the combined forces of Microsoft and Yahoo would either have to carve into Google's hitherto unassailable lead in search and search-based advertising or do something else ground-breaking. It would not be enough just to join forces and save money.

The best opportunity for Microsoft-Yahoo, and for Google, lies in making an inroad into other forms of advertising than search: the virgin territories of online display and brand advertising by companies.

This is the acquisition's hidden promise and the motive behind Google's planned $3bn purchase of the online advertising group DoubleClick (NASDAQ: DCLK - News) and Microsoft's $6bn acquisition of aQuantive. "If it works, and that is a big 'if', it is the core of the deal," says David Hallerman, a senior analyst at the research group eMarketer.

The idea is that Google and Microsoft-Yahoo could use technology to place ads more cheaply and efficiently. Instead of media buyers negotiating individually with publishers for space on internet sites, the process would be automated. Ads would be bought and sold like shares on stock exchanges.

It sounds like a fine idea and it will be if it turns out to be correct. The problem is that it is unproven and there are reasons why it may not pan out. Internet publishers and brand advertisers such as Unilever, IBM and Procter & Gamble could easily end up shunning the machine.

At the moment, most display advertising on the web is on portals such as Yahoo, AOL and Microsoft's MSN. These are the destinations where many internet users have spent most time and with which big advertisers are comfortable. But their share is falling. JP Morgan estimates that they now account for 29 per cent of online minutes compared with 42 per cent in 2002.

After them comes the deluge, or the long tail as it is often known. Not only are there millions of other internet sites but the market for advertising is becoming more fragmented. The rise of blogs and social networks such as Facebook and MySpace means that advertisers are faced with a bewildering array of possible slots for ads.

Despite the excitement about the rise of online media, a lot of sites are virtually worthless to advertisers. They have small, ill-defined audiences and risqué content. Why would anyone want to associate his company with the average 15-year-old's MySpace page? Eighty per cent of ad slots on the internet fetch less than $1 per thousand clicks (CPM).

This is the internet's financial flaw and any company that solves it will make a lot of money. Google admitted last week that, having guaranteed MySpace $900m over three years, it is having problems generating enough cash from social network ads.

Internet companies are now tussling with traditional advertising groups to solve it. WPP, which owns the media buying agency Group M, has bought the new media start-up 24/7 Real Media and a stake in Spot Runner to get itself into the game. Microsoft-Yahoo would be another contender.

The idea that many are pursuing is that of the ad network or exchange. Essentially, this allows advertisers to place a single ad across hundreds, or even thousands, of internet sites at once. The agency in the middle selects appropriate sites for the ad, which is distributed to gain millions of hits.

There are various ways of grouping internet users whom advertisers want to reach. One is to select sites with similar interests. The best example at the moment is Glam.com, which looks like one website but is a collection of 350 fashion-related sites.

Another way of reaching potential customers is through what is called behavioural targeting. People who go to sites that display their interests - car-buying or share-trading sites, for example - are tracked by agencies that use this data to put suitable ads on their screens.

All this sounds promising for advertisers but there is a problem. An ad is not a fungible commodity like a share in a company. It matters to advertisers where their ads appear and it matters to publishers which ads appear on their sites.

In practice, publishers who sell their own ads get much higher CPMs than if they take bookings through networks. "When you operate a tailored and targeted site, it pays you to have your own sales force rather than have it aggregated," says Sir Martin Sorrell, WPP's chief executive.

The new media world thus has similarities to the old one. Publishers such as Condé Nast or Time (NYSE: TWX - News) Inc sell space in publications such as Vanity Fair and People magazines themselves and will prefer the same method online. For publishers with power, ad networks are second-best options.

This is not to say that ad networks, behavioural targeting and other attempts to forge order out of internet chaos are doomed to failure. They will have a role in the new media. But it is not clear how big that role will be and it may prove smaller than many technology companies hope.

So Microsoft-Yahoo is a bet on a hazy future. It could be that Yahoo is so cheap that Microsoft is not relying on overturning the advertising world with technology. For its own sake, I hope that it is not.

john.gapper@ft.com