NEW YORK (TheStreet) -- As bad as Yahoo!'s (YHOO) earnings were last night, coming down on investors like a sack of wet cement, the muted reaction they received -- compared to the results of Apple (AAPL) - Get Report and Microsoft (MSFT) - Get Report -- shows just how low expectations for Yahoo! have become of late.

In fact, views are so pessimistic now about Yahoo!'s business, it makes me look at the stock as something that can't really get much worse.

The comments from management on the second-quarter earnings call were vague, and often seemingly out of touch with business reality. For that reason, I can understand why most take a pass on investing in Yahoo!, especially when there are still so many complexities and it faces an unclear path to growth.

CEO Marissa Mayer tried her best last night to dress up the results to sound like great accomplishments. She was proud to boast about growth in mobile -- up to $255 million revenue in the quarter, up 55% year-over-year.

Here's another way of presenting Yahoo!'s data, though: 80% of the company's total revenue still comes from its PC business. Just think about that versus what Facebook (FB) - Get Report is doing right now.

Mayer boasted about how top-line revenue for Yahoo grew the most in five years to reach $1.2 billion in the quarter. She asserted that this higher top-line revenue number (including traffic acquisition costs, aka TAC, what Yahoo! pays to get traffic) is a leading indicator of eventual growth to revenue ex-TAC. This is utter nonsense. Mayer knows it. CFO Ken Goldman knows it. Most importantly, Yahoo! investors know it.

Anyone could be appointed CEO of Yahoo! tomorrow and decide they want to buy traffic. When you pay $1.20 to get $1 worth of traffic, you're not taking the first step in a turnaround. You're on the road to financial ruin.

For the second quarter, Yahoo! earned an adjusted 16 cents a share on $1.243 billion in revenue, including traffic acquisition costs, up from $1.084 billion in the second quarter of 2014. If you strip out TAC, Yahoo! generated $1.043 billion in revenue this year, compared to $1.04 billion in the year ago quarter. That's a lot of work to get to exactly the same spot. Pass-through revenue is not real revenue. What Fortune 500 CEO would even expect his or her investor base to believe that it is?

Another thing that stood out in the report was that Yahoo! was free cash flow negative in the quarter -- something that boggles the mind. I can't remember the last time that happened at Yahoo! -- if it's ever happened before. Yahoo! has been a constant cash machine for its entire life. That's why private equity would love to buy it and install a real CEO to run it.

Given the free cash flow burn, I wouldn't be so quick to take a bow for eliminating 1,300 employees over the past year.

I also couldn't believe that Yahoo! spent exactly none of its nearly $7 billion in cash reserves on stock repurchases in the quarter. Not even when the stock drooped into the $30s. They've previously been happy to crow about their stock repurchases in the high $40s.

The good news for Yahoo! bulls is that Search and Display did grow. However, again when you strip out TAC, that growth was pretty modest. Most of this growth is coming in the Americas, while Asia and EMEA are basically drying up.

The outlook for the third quarter was a carbon copy of what they estimated for the second quarter -- in a word, tepid.

When it comes down to it, Yahoo! is clinging to its PC-based revenue and trying to do all it can to leverage that traffic to get some mobile sales. But advertisers are just not that interested yet. And the new Yahoo! mobile products that Mayer was supposed to create out of thin air -- as quickly as she created a logo over a weekend -- have not arrived.

It's no yahoo for Yahoo!.

This article is commentary by an independent contributor. At the time of publication, the author was long YHOO.