‘Tis the season to make year 2009 predictions. Today, Standard & Poor’s analysts released their predictions for the Internet in 2009. Scott Kessler, Internet analyst with S&P, says Microsoft (MSFT) and Yahoo (YHOO) will “finally bury the hatchet” next year “and decide to join forces to better compete against Google” (GOOG). Kessler says Microsoft won’t buy Yahoo (well, they’ve already said they were no longer interested in that), but rather pursue a joint venture “related to search.” He thinks that could lift Yahoo shares, to which he assigns a “Buy” rating.

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The Nasdaq Composite today plunged 199.61, or 9.14 percent, to 1983.73, as investors fled equities amid a growing sense of crisis in the financial sector. Stocks started off sharply lower this morning; the slide accelerated after the House rejected a proposed $700 billion buyout of the financial sector.

The Nasdaq’s slide is the eighth largest ever in terms of points, and the third biggest ever on a percentage basis. The index has been tracked since 1971.

The only two days which were worse on a percentage basis include the 11.4 percent slide by the index on Black Monday, Oct. 19, 1987, and the 9.7 percent drop on April 14, 2000.

While selling was widespread, the tech-heavy Nasdaq Composite suffered the worst decline today of the major indexes. The Dow Jones Industrial Average fell 748 points, or 6.7 percent, to 10,394.92, the worst day ever for the index in terms of points. The S&P 500 dropped 102.7 points, or 8.5 percent, to 1,110.27.

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