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Whither Yahoo's Fortunes?

The rumors are not new, but they're getting hard to ignore.  The New York Post has turned up sources close to Yahoo who warn that CEO Jerry Yang might be forced to sell a large stake of the company to a private equity firm out of fiduciary responsibility to the shareholders.  Yahoo's stock is hovering a couple points above its 52 week low. The company is expected to lay off hundreds -- if not thousands (Henry Blodget has reported 2,500).

Next Wednesday the company reports its fourth quarter earnings. In the interest of showing good faith for the investors, official word on the extent of the layoffs (it seems now more a question of how many, not if) could come before or along with the earnings, which are expected to be bleak.

Yahoo continues to lose market share and ad revenue to Google, but of course the other portals are, too. And with the economy threatening to slip into recession, Yahoo isn't the only company that will be tightening its belt. Google's stock has dipped of late, and could very well slide further in a jittery economy.

But Google and Yahoo are catching the economic downturn on a different plane than Yahoo. At CES earlier this month, Yang laid out a vision for making Yahoo the "indispensable" starting point on the Web. At this precarious point, we're left to wonder if Yang will even get the chance to see it through.

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