Yahoo! Doubters Return

Shares slump as investors face reality post-CEO Terry Semel.
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Yahoo!

(YHOO)

CEO Terry Semel may finally be out, but wild speculation about the company's future is back in.

Shares of Yahoo! spiked in after-hours trading late Monday on news of Semel's ouster as investors felt real change may finally be on the way at the stumbling Web giant.

But within 30 minutes of Tuesday's session, shares slipped into negative territory as a more sober reality -- riddled with uncertainty about the company's prospects -- set in. Yahoo! was recently off 39 cents, or 1.4%, to $27.73.

Indeed, it's difficult for observers to come to a conclusion about anything at the company, beginning with whether newly appointed CEO Jerry Yang, a co-founder and formally "Chief Yahoo!" at the company, will be in the position for the long haul.

In a conference call on Monday, Yang said that his appointment was not a temporary affair and was the result of a thorough consideration of candidates inside and outside the company.

(According to a

Wall Street Journal

story on Tuesday, the board sees Yang in an interim role as it continues to search for other qualified candidates, according someone familiar with the situation.)

Yang also said Yahoo! plans on remaining a stand-alone company. But for many, Semel's removal launches a new wave of speculation about whether the stage is now set for a takeover or major strategic change at the company.

Along with the usual list of acquirers such as

Microsoft

(MSFT) - Get Report

or

AT&T

(T) - Get Report

,

CNBC

has reported that a new player such as

News Corp.

(NWS) - Get Report

is considering pushing for a major deal with Yahoo!.

News Corp could sell its MySpace property to Yahoo! for as much as $10 billion, taking a 25% stake in the company as a result. MySpace's popular Web site could then switch to Yahoo!'s search service from the one provided by

Google

(NWS) - Get Report

.

But other commentators argued that the change in management means Yahoo! is less likely to be sold anytime soon. "Our rationale is that this management team is very close to Terry Semel and, as such, if a deal was going to happen in the near term, they would likely have weathered the financial shortfalls until it was announced," Goldman Sachs analyst Anthony Noto wrote in a research note on Tuesday.

Much of the commentary highlights the irony regarding how much seems up in the air at Yahoo! given the limited degree of the change announced Monday. Yang and Decker already had top spots at the company and were major influences in shaping its direction. Semel, meanwhile, will remain with the company as nonexecutive chairman.

"While Yang may provide leadership, we think investors were hoping for more of a fresh start once Semel left," UBS analyst Ben Schacter wrote in a research note on Tuesday. "Given Yang's previous position at the company, it's unclear what he plans to change."

Among the few things that found a general consensus was that having Yang back in charge meant Yahoo! was determined to return to its technological roots. Raising the profile of a prominent a Silicon Valley figure like Yang could also allow the company to attract more tech talent as well.

Yang will "add a more technology centric focus for the company," Bear Stearns analyst Robert Peck wrote on Tuesday.

"The new leadership structure will enable Yahoo! to concentrate on execution," Credit Suisse analyst Heath Terry wrote in a research note on Tuesday.

Goldman Sachs, Bear Stearns, UBS and Credit Suisse all make markets in shares of Yahoo!

Yahoo!'s top ranks are now made of two high-profile tech-oriented billionaire founders and two financially oriented executives who both hailed from boutique tech investment banks. Nobody at the company's top has much experience running a large, famously complicated Fortune 500 company on a day-to-day basis.

More than a rock-solid focus on technology -- or anything else, for that matter -- Yang's appointment may mark the beginning of an era of even greater uncertainty for the company.