[graemep]

I was surprised by the amount of cash they have too.

Other than that, it is an entirely incompetent piece:

1) He appears to think that acquisitions can only be paid for with cash. 2) He does not explain why he thinks search is Yahoo's critical business: Carol Bartz does not seem to think it is. She may well be wrong, but he needs to explain why he thinks so. 3) MS may be willing to invest heavily in search, but throwing money at something does not guarantee results. 4) Yahoo can afford deals such as the one MS has made with Verizon - especially as the wording he quotes implies that the payments are being made over a period of years and are likely to be covered by the revenues it generates. If MS is willing to make unprofitable deals to gain share it will make Yahoo weaker in that market, but he gives no evidence of that. 5) Yahoo has huge amounts of traffic, and a lot of good products. Even the search engine is at least on par with Bing.

[encoderer]

You can't buy a company with stock as weak as Yahoo's lately without paying a disgusting premium.

I have no idea if the guy is right or wrong on his premise, but his analysis of their business isn't too far off from how I see it.