Think of this one from the internet marketer's perspective.  Just a few years ago, internet marketers exclusively focus on Google to conduct just about any internet advertising campaign.  Then Facebook emerged.  You could still ignore Microsoft and Yahoo because the two systems were different, difficult to master, and only offered an incremental gain in audience.  With the new partnership, you'll just have to log into AdCenter to run ads across both the Yahoo & Microsoft networks.  With 30%+ market share right out of the gate, it's easy to justify now. 

Google AdWords is a mature auction model whose prices may have been artificially high because of the lack of competition.  Now internet marketers have three viable options:  Google, Facebook, "Binghoo".  Two are much cheaper than the third, and both also now have a big enough audience to matter.  And I am making no assumptions yet about Twitter, which could become a 4th viable internet marketing option in coming years.

Overall, I expect margin contraction for Google.  Price/demand will gradually drop as internet marketers investigate and begin to use other viable opportunities.  This has been coming for awhile, but it's here now.  Google officially needs a new trick and fast.