Yahoo up for sale

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First, the board should decide: media company or tech company.

If Yahoo! is a media company -- which is more conservative since its peers would be AOL, Viacom, et al., and not Google, Facebook, et al. -- then merge/acquire Netflix ($11.5B market cap) and anoint Reed Hastings CEO. Let him navigate Nethoo through the transition to new media. Combining distribution and content failed for AOL-TW, but with the media industry in flux and with more content surfacing from the grassroots, perhaps now is the time for vertical integration.

If technology, then Yahoo! needs a new culture and a bold vision to attract the most talented engineers. No ambitious engineer wants to slave under PMs when they could flourish in engineering-oriented companies like Google and Facebook. Yahoo!'s mission? Help users discover, personalize, and consume content.

Be the service -- mobile or web -- people turn to when they have nothing to do, when they want to find a cool article, deal, song, video, picture, restaurant, conversation, or event.

Today, Google is where you go when you know what you want. Yahoo! could help people upstream of search -- before people know what they want. Which, conveniently, is most of the time.

Lots of companies tackle the problem in different areas: Digg with news, Pandora with music, Yelp with local businesses, Instagram with photos, Groupon with deals.

With content proliferating faster than ever before, there is a need for some service to help people discover and consume content. Users don't want to hunt for content. They want the coolest deals, music, shows, restaurants, and news to come to them.

Analyzing the web for the most relevant content -- no matter the type -- at a personalized level is non-trivial. Because it's a daunting technical problem, it will attract smart engineers.

Despite the naysayers, Yahoo! occupies an enviable position with massive assets: hundreds of millions of users, deep advertiser relationships, and an iconic brand. The question is how to organize these assets into a sustainable and promising company.

Yahoo! has the cash flow to acquire some pieces, perhaps go private, and execute against some vision.

There is an opportunity to once again innovate with compelling technology and recruit talented engineers. There is an opportunity to help users navigate the explosion of online content in a smarter, more natural way. There is an opportunity for Yahoo! to reassert itself as one of the premier companies in Silicon Valley, one led by pioneering technology.