It's value is derived from its holdings in other companies - primarily Alibaba and Yahoo Japan. Alibaba holdings alone worth at least $40. YHOO should just start passing its cash flow back to shareholders much like an MLP. I see no way of winning if they think they can take on GOOG in search/advertising. However, due to its holdings in other companies the downside risk here is very limited - upside is $75-$80 in medium term as it's valuable holdings grow earnings. The big cash inflow coming from Alibaba IPO should be distributed to shareholders or used for massive share repurchase. No sense squandering it in these overpriced social media plays that have little chance of contributing any meaningful cash.