Yahoo investors should call for Yang's head

Yahoo investors have all the reason in the world to feel bitter today, as the company stock hovers at $12, and the Yahoo-Google ad deal has been put on hold because of widespread legal and business opposition. Not that many months ago, Microsoft offered $31 a share for the company. If I owned Yahoo stock, I'd be calling for Yang's head.

One big stockholder is in essence calling for Yahoo to cut its losses, and sell itself to Microsoft for $22 a share. Mithras Capital, which owns 0.14 % of Yahoo, is sending a letter to both Yahoo and Microsoft, proposing the deal.

In a press release, Mark Nelson, a partner of Mithras Capital, was blunt about the need for Yahoo to take action:

It is imperative for the Yahoo board to embrace this proposal as the best outcome for long-suffering Yahoo shareholders.

Long-suffering is right. At this point, Yahoo is stuck in an impossible situation. Its deal with Google is being viewed very skeptically by regulators, and there's a reasonable chance it will never be approved. The stock market appears to go in only one direction --- down --- and Yahoo stock is being hammered. Yahoo would be lucky, at this point, to get $22 a share from Microsoft. I'd guess it would get significantly less.

There's no sign that Yahoo will sell to Microsoft, though, which is a very big mistake. The Yahoo press room Web site identifies Jerry Yang not only as CEO, but also as "Chief Yahoo." That's certainly an apt description, and may well be how Yang is remembered by history.

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