Online ad growth has been slowing down for the past few quarters. That situation has been attributed to the law of the large numbers, lack of credible audience measurements and lately, the faltering U.S. economy. While Microsoft’s (NSDQ: MSFT) massive $44.6 billion bid for Yahoo (NSDQ: YHOO) wouldn’t be enough to turn things around completely, the union could at least offer a needed shot in the arm as marketers are expected to pull back spending. Looking back over the past year, which saw a flood of acquisitions in the digital ad space, most observers expected to see the M&A fever begin to cool. It’s tempting to say that this would still be fairly unique - after all, how many other Microsofts and Yahoos are out there? - it will be harder for other online ad networks to compete with a consolidated Microsoft/Yahoo and Google/DoubleClick.

As for the particular competitive advantages a combined Microsoft and Yahoo would have in the online ad space, they are not hard to fathom. I spoke with Tim Hanlon, EVP-ventures, for Publicis Groupe’s interactive marketing consultancy Denuo, who offered some insights about what the deal would mean for the online ad industry—that is, if Yahoo responds favorably and if it can clear anti-trust hurdles. Some of the points he raised include:

-- Microsoft is newly emboldened as a serious advertising infrastructure company, and adding Yahoo’s skills in display advertising, auction/marketplace and online services would take them to a place MSN could/will never get them to alone.  He’s not sure the cultures will mesh easily in the near-term, but “the aQuantive acquisition-integration has gone much better than most initially imagined, so there’s proof they can do it.”

-- Online advertising’s share of total ad spend has been growing steadily, but the amount marketers devote to digital remains lower compared to traditional advertising. And despite the increased profile of ad networks in general, marketers still tend to view that model as a sideline or an experiment. A consolidated Microsoft/Yahoo would help accelerate the spending shift from traditional to new media and likely lead to greater attention for ad exchanges. Hanlon: “While no one on the media buying side likes to see a lessening of choices, this combination would definitely hasten the “mainstreaming” of digital advertising among corporate marketers and their agencies, if there was any doubt previously.”

-- Smart pre-emptive move on MSFT’s part with the 60 percent-plus premium. The offer is clearly designed to prevent another bidder - especially a content player like CBS (NYSE: CBS), Viacom (NYSE: VIA) or NBCU - from attempting.  Still, Hanlon thinks that Yahoo is now definitely in play, and that there’s at least another bidder - especially on the content side - now contemplating - or dusting off - an offer.

-- On another note, Hanlon wondered if this would hinder Yahoo’s $150 million proposal to buy online video service Maven Networks - “a fairly important snag by Yahoo,” he said.

-- Search: Separately from my conversation with Hanlon, in December, Google (NSDQ: GOOG) sites’ share of core searches stood at 58.4 percent, while Yahoo sites ranked second with 22.9 percent, followed by Microsoft, whose sites comprised 9.8 percent, according to comScore figures released last week. So while it wouldn’t diminish Google’s search dominance right away, it would certainly go a long way to closing that gap.

-- Increased ad scale: J.P. Morgan internet analyst Imran Khan offered some insight on how the lack of scale between Google on one side and Yahoo and MSN on the other, could be bridged. In a research note (not online), Khan said: ”On a global basis, MSN/Yahoo could reach approximately 600 million unique users and have approximately 28.3 percent of all searches. Further, we believe the increased scale of the combined search entity would lead to improved monetization due to a number of advertisers, which positively impact coverage, click-through rates, and pricing.” J.P. Morgan believes that regulators will approval the deal - Google will still dominate search market share - and that Yahoo investors should accept it.