Mapping has already become one of the most competitive arenas online -- a visual version of local search. Barry posted earlier about how Microsoft wants to enable dynamic updating of online maps with traffic and other local data in real time. Last week, as I posted on my blog, the company announced the well-known acquisition of Vexcel corporation. Vexcel is a "remote sensing" and mapping company that enables, among other things, extremely high resolution aerial photography and 3-D mapping.
Microsoft is investing very heavily in maps and map-related technology. It sees mapping as an opening in its struggle against Google and now considers itself the technology leader in mapping. Virtual Earth, like Google and Yahoo!, has an API and the company is starting to license its product to companies like Zillow and YellowPages.com. Google remains ?ahead? in terms of the proliferation of its maps and use of its API. (According to Philipp Lessen, Google has started serving AdWords in Google Earth.)
Because of the importance of mapping both "generically" to consumers and as an entry point for local search, neither Google nor Yahoo! can afford to allow Microsoft to break out in this area. Thus I would expect to see more investment and an acceleration of product development in the near term.