Yahoo! Rising From the Ashes but Stock Remains Cold

NEW YORK ( TheStreet) -- Something happened last week that appears to have flown completely under the radar. Search giant Yahoo! ( YHOO) and CNBC, which is owned by Comcast ( CMCSA), the largest cable provider in the U.S., formed a content-sharing alliance to distribute business news and original content as a way to not only shore up their respective digital online presence, but also extend their individual web audience.

Yahoo!, which continues to battle credibility issues, has been under a considerable amount of scrutiny of late. The company has absorbed more punishment from Wall Street than any company deserves due to the scandal that surrounded Scott Thompson, its recently ousted CEO. It understands now that what it needs more than anything is a fresh start. While the partnership with CNBC does not wipe the slate clean as would be the case if acquired be a name such as Microsoft ( MSFT), it does remind investors that the company is still a dominant media power and likely will be for many years to come.

Be that as it may, Yahoo! continues to be one of the most misunderstood companies on Wall Street. It seems that investors still want to remember the company as a technological pioneer. But aside from having established the original concept of search, the company has never really been a technology power -- at least not in the true definition of the word.

As much as I still value its brand today, I think Yahoo! has dropped the ball too many times on a long list of possible lucrative businesses, many of which are now being enjoyed by its chief rival Google ( GOOG) as well as social media giants Facebook ( FB) and Twitter. Not to mention it once had a popular online music service long before Pandora ( P) came on the scene.

So Yahoo! now understands its current state of affairs and what is at stake in terms of its future. After all, the errors of its ways have contributed to the company's annual revenue falling from its high in 2008 of $7.2 billion to just $5 billion for fiscal 2011, while Google has enjoyed strong revenue increases during that same span, reaching almost $40 billion last year.

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