If Yahoo accepted Microsoft's offer of $31 a share in 2008, shareholders would be better off -- even though $31 may have seemed like a low-ball bid at the time.
NEW YORK (CNNMoney.com) -- Does anyone care about Yahoo anymore?
Sure, Yahoo (YHOO, Fortune 500) still has a boatload (to use a favorite term of Yahoo CEO Carol Bartz) of users. I still go to Yahoo Finance a lot, for example. Ditto for Yahoo Mail. And I do love Yahoo's fantasy sports sites.
But this isn't 1998 anymore. Being a portal doesn't make you a leader. Having eyeballs doesn't necessarily make you a financial or technological juggernaut.
While rivals like Google (GOOG, Fortune 500), Facebook and Apple (AAPL, Fortune 500) continue to innovate in the worlds of search, social media and mobile, many wonder just what Yahoo is other than a slightly bigger version of AOL.
And heck, even AOL (AOL), which may get a slightly worse rap than warranted due to its former role as an albatross around the neck of my corporate parent company Time Warner (TWX, Fortune 500), has done a decent job of differentiating itself from the competition lately thanks to a keen focus on local content.
So it's no wonder that Yahoo's stock continues to slump. The stock is down 18% this year and is only 7% above its 52-week low.
A post I noticed on StockTwits about Yahoo sums up the company's sorry state the best. "The only worse thing than being talked about is not being talked about. $YHOO," tweeted Eric Jackson, managing member at Naples, Fla.-based hedge fund Ironfire Capital on Wednesday evening.
This is a pretty damning comment from someone who has followed the company very closely. Ironfire owned a position in Yahoo a few years ago and began pushing the company to get rid of former CEO Terry Semel in late 2006. That wound up happening in June 2007.
Jackson also wanted the company to accept Microsoft's (MSFT, Fortune 500) takeover offer in February 2008. But Yahoo spurned the deal, even though it valued Yahoo at a 61.6% premium at the time. So Ironfire sold its position a few months later.
I caught up with Jackson on the phone Thursday to get more of his thoughts about what the company could do to reclaim its former glory.
Jackson said that the biggest problem is that there doesn't seem to be a focus on any specific type of product or area of technology.
"It struck me the other day how little we've heard about Yahoo in the past six to 12 months," he said. "That symbolizes how the company is not as relevant with where the world is moving, especially with respect to mobile and social media. The company seems to be adrift."
Yahoo, to its credit, has done a lot since Bartz joined in January 2009 to become leaner and meaner in order to get profits back on track. The company's net income increased by 40% last year even though revenues slipped.
But the cost-cutting may have come at a price. Yahoo now lacks strategic vision, Jackson said. He thinks Bartz was the right person to whip Yahoo into shape in the short-term but that a new CEO might do a better job of actually engineering a sustainable turnaround.
I think he's right. Yahoo's total sales are expected to be flat this year and analysts are only forecasting a 4% rise in 2011. That's anemic for an "old media" company, let alone a "new media" firm like Yahoo.
The best you can say about Yahoo these days is that it has done a decent job of partnering with, and occasionally even outsourcing functions to, other relevant companies.
Hence, links to Facebook and Twitter on Yahoo's home page. And the decision to let Microsoft's Bing power search results on Yahoo and give up control of its job listing service HotJobs to Monster Worldwide (MWW).
But Yahoo can only go so far by relying on the help of rivals. Even if companies like Facebook and Microsoft represent, to use an ugly bit of jargon, co-opetition as opposed to true competition, Wall Street is not going to get excited about Yahoo until it can find a way to really get sales growing again.
"The main part of Yahoo is languishing. Another shakeout is needed and warranted. Yahoo has to go beyond hacking away at things and focus on new products," Jackson said.
- The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney.com, and Abbott Laboratories, La Monica does not own positions in any individual stocks. 
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