Question

why does the earth have an equatorial bulge

Answer 1

Inertia or centrifugal force.. when u take a balloon and dip it water and make is spin, the water flies off (tangentially ) right?
even when u go to some fair, and you see those circular disks with hangings and u sit on it, and it rotates, due to inertia, the hangings (and you).. tend to move away from the centre ya? (they would love to fly off like water drops, but they can't since they are fixed )

now same concept applies here, when earth is rotating, the particles of earth want to get throw off just like water drops.. but these particles can't(cause gravity holds them together.. jsut like those hangings).. and thus they end up just bulging a little..
(this effect is max at equator, cause at equator particles are moving the fastest.. and this effect is zero at poles) so the bulge is only at the equator

sometimes when u play with a ball and u hit it at some crazy angle, such that it starts spinning, you can see it being squashed too.. (i had always wondered what nonsense was that) :D
faster the spin, more the bulging!