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Despite a recent, high-profile CEO change, Barron's says Yahoo (NASDAQ:YHOO) continues to struggle, leading Bernstein's Jeffrey Lindsay to comment, "It is becoming increasingly difficult to put a positive spin on Yahoo's continuing misfortunes." CEO Jerry Yang, who took the reins in June (full story), has made a number of management shifts, and cut costs in some divisions, but the changes have fallen far short of the "grand gestures" many expected.

Lindsay says he's discouraged by the company's operational fumbles, such as a much-bemoaned outage at its shopping site on Cyber Monday which left many internet merchants stranded (full story). He also says Yahoo dropped the ball by not disclosing a recent change in its co-branding deal with Canadian ISP Rogers, which sees it forfeiting its share of monthly subscription fees in exchange for a simple ad revenue share; Rogers paid Yahoo $52 million to renege on its previous deal. Lindsay says the change is likely to influence similar deals with AT&T (NYSE:T) and others due for renewal, which could cost the company $750 million/year in revenue. He's also discouraged by Yahoo's continual loss of search share (17.8% U.S. and 12.8% globally).

Lindsay suggests Yahoo revive itself by: 1) Partnering with Microsoft (NASDAQ:MSFT) in search; combined the two would have scale. 2) Move away from selling ads on a CPM basis (vulnerable to a downturn), instead building its network through organic growth and acquisitions. 3) Cut its workforce by 20%, top down. If not, he says, Yahoo "... could lose a lot more ground. Investors could become frustrated. And steps could be forced upon them."

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Source: Yahoo: Change or Be Changed - Barron's