Yahoo!: Feeble Attempts at New Products

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Since Carol Bartz's departure, Yahoo! ( YHOO) has been for the tech press what Paris Hilton is for TMZ -- a constant source of entertainment. The company has been an easy punching bag for critics who slam its management and board for the steady decline in the online advertising sector. Nevertheless, it seems Yahoo! wants to reassure its investors and employees that it's still very much up and running with the company, recently unveiling some new features for its Flickr photo service and announcing a Facebook alliance. Yahoo's online advertising has struggled in recent years as search giant Google ( GOOG) has gobbled up market share in search and Facebook in display ads.

We have recently launched a revised price estimate of $18 for Yahoo's stock, which is about 30% above the current market price.

With a new Flickr app for Android and a separate tool for enhanced sharing of Flickr photos, Yahoo! is trying hard to ignore its leadership and strategy crisis and act like business can carry on as usual. This announcement comes just days after Yahoo! announced an integration of Yahoo! News and Facebook.

Yahoo! has limited networking or sharing tools at its disposal, and we think integrating with Facebook is a desperate move by Yahoo! considering that Facebook is its biggest competitor in the online display advertising market. On the other hand, Yahoo! may not have a choice as the time spent by an average user on Yahoo! sites dwindles compared to time spent on Facebook, which is rising. As the old saying goes, "If you can't beat them, join them." This could be precisely what Yahoo! is doing.

Most Important Question: What is Yahoo!'s Next Move?

However, it is highly unlikely that these new developments can distract investors from the growing concerns over Yahoo!'s fate. It's too big to ignore and Yahoo! still has a respectable footprint as well as valuable assets, especially in Asia.

The growing consensus is that Yahoo! might be sold whole or in pieces, especially since the company management has also dropped similar hints perhaps in a move to solicit interest. Private equity firm Silver Lake was reportedly looking at buying Yahoo! to spin off its Alibaba stake and just recently announced plans to take a stake directly in Alibaba. So while Yahoo!'s board might want a sale, finding a buyer may be difficult and so it needs to take steps to right the business.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.