The Five Dumbest Things on Wall Street This Week

1. Crunchy Time

Competitors are eating Yahoo!'s (YHOO) lunch.

That's the shocking conclusion of an internal memo that surfaced this week. Senior Vice President Brad Garlinghouse complains that Yahoo! has grown fat and lazy. Lacking focus, execs are "stymied by challenging and hairy decisions," he writes.

"I've heard our strategy described as spreading peanut butter across the myriad opportunities that continue to evolve in the online world," writes Garlinghouse. "I hate peanut butter."

Yahoo! backers certainly have had plenty to chew on lately. The stock is down more than 30% this year as the Sunnyvale, Calif.-based company cedes ground in the Net ad market to archrival Google (GOOG).

Garlinghouse advocates firing 15% to 20% of workers in a bid to shake things up. And why not? Garlinghouse has been there and done that.

Before coming to Yahoo!, he worked for broadband Internet service provider @Home. It went bankrupt after once carrying a stock market value north of $20 billion. Then he was CEO at voice-over-Internet phone outfit Dialpad. It filed Chapter 11 in 2001 before being sold in 2005 to Yahoo!.

Garlinghouse also served with investor @Ventures, which ended up as part of CMGI (CMGI). That Waltham, Mass.-based conglomerate has seen its shares lose 99% of their value since early 2000.

"It is my strong belief," Garlinghouse writes in the peanut butter memo, "that we need to act very quickly or risk going further down a slippery slope."

Take it from a guy who has done his share of slipping.

Dumb-o-Meter score: 93. "I'm proud to admit that I bleed purple and yellow," Garlinghouse writes. "I'm proud to admit that I shaved a 'Y' in the back of my head."