Yahoo needs to kill off half of their products and just focus on four things:
* news (finance & sports)
* Search & Portal (that's where they make $$$)
* YMail (because there are still millions of users)
* fantasy sports and extend it.
Spin off Tumblr and Flickr into a startup focus on content and high-quality photo source (TBH there is very little quality content on Tumblr and the attraction / hype is gone - speaking from user after five years of using Tumblr), and other applications should be killed, including their article reading mobile app, Developer network, and the newly resurrected Y! Messenger.
BTW, Yahoo is one of the most generous companies out there paying security bounty (good and bad for too many submissions :] )