Early in 2008, rumors of Mercury's elimination circulated as news of the lack of new models beyond 2011 broke. Now, the potential for such a decision seems even more realistic as Mercury's lineup has shrunk to just four models, two of which - the Grand Marquis and the Mountaineer - are also slated to stop production soon.
With no future model outlook and its current lines dying off, Mercury's future doesn't look bright. The Milan and its hybrid variant are the only two thoroughly modern Ford-family products under the brand right now, and with Ford (Fusion) and Lincoln (MKZ) already featuring their own versions of the same platform, it's not likely that the Mercury variant is adding much to the party.
On the other hand, with Ford using Lincoln to firmly grasp the high end of the market and the Blue Oval logo itself to push further into the economy market with the U.S. launch of the new Focus and Fiesta impending, keeping Mercury around to focus on the mid-range may not be a bad idea.