Yahoo! Inc. (NASDAQ: YHOO) had a terrible week. Yahoo! had an awful three months. Heck! Yahoo! had a dreadful year. Compared to the NASDAQ, which gained around 5% year to date, and its main competitor Google Inc. (NASDAQ: GOOG), which lost about 1% YTD, Yahoo! shares lost over 40%. And if there was ever a time for an exclamation mark, a 40% loss in market value is definitely one of them!

It all started Monday with news that Google was about to close the deal with YouTube and everything just went downhill from there. It seemed as if the investment community chose to focus on Yahoo! rather than on the deal maker, Google. Here, at Blogging Stocks, we were no different as my colleagues and I were just as critical as the investment community at large and were all wondering as to Yahoo!'s next move. The picture painted from the posts seemed rather dire:

• Brian White thought that after the close battle in which Yahoo! lost YouTube to Google, the pressure is now on Yahoo! to close some sort of deal - Facebook perhaps?
• Douglas McIntyre thought Yahoo! and AOL are both the losers in the Google-YouTube deal and therefore, in order to compete with Google, Yahoo! should buy AOL. But that's not all, Doug also thinks it might be time for Yahoo! CEO, Terry Semel, to retire.
• Jon Ogg warned that with this deal, Google may surpass Yahoo! as the number one combined destination on the web, or come close to what's been Yahoo!'s clenched position for a while now.

• Peter Cohan doesn't think Yahoo! should buy Facebook. Price per registered user at Facebook is too high and Facebook is structured differently from other social sites, more restrictive, which could negatively affect advertising prospects.
• Sarah Gilbert also cautioned of a hasty move on the part of Yahoo!
• Finally, I was convinced the reaction to the same deal would have been different had Yahoo!, not Google been the buyer, mainly because of the problems Yahoo! has right now with its advertising and the constant delays in Project Panama, the new search advertising platform. Yahoo! needs something to distribute before buying a distribution channel, I argued.

Yet, as time went by and Yahoo! stock kept reaching new 52-week lows (see chart) without a word from the company, even I started to lose patience. It wasn't just that, even the company's regular ongoing business seemed to be suffering as a Search Marketing bug went unfixed for three days. Yoohoo, Yahoo!, I cried, is anyone home?

At Yahoo!, things aren't working internally it seems, nor externally. I never thought the acquisition of Facebook would be such a great thing, much along the lines of what Peter Cohan wrote, but Yahoo! just can't seem to decide what it wants. Talks with Facebook have been ongoing for a while now; in July the parties even came close to an agreement. Yet Yahoo! remains indecisive. Yahoo! should either go for it, or not. If management decided Facebook is not what they want, they should focus their attention elsewhere, find another social networking site that could work.

Similarly, according the New York Times, Yahoo! was in negotiations with YouTube before Google took advantage of a lull in talks and swooped in to close the deal in days.

It has been suggested that Yahoo! is trying to do too much before catching up to competitors in its core business. That too is a focus problem. Indecisiveness, acting too little and too slow.

To the internal problems of, among others, the delays in Project Panama and the inability to close deals or decide what the company wants and needs, add the problem of key personnel leaving lately and the inability to recruit talented employees, and you get really one problem. Management. Perhaps it is time for a shuffling in the high ranks, most likely the CEO, Terry Semel, too -- could he, would he draw his own conclusions?

It's interesting that today, after a couple of days of analysts trimming down estimates or plainly downgrading Yahoo!, that the share finished a terrible week on a positive note, up 1.24%, or 30 cents to close at $24.42.

Next week ,Yahoo! will report earnings. Analysts consensus now calls for Yahoo!'s Q3 revenue to increase by 23% year-over-year to $1.15 billion. Earnings per share for the quarter is estimated to be 11 cents, down from 16 cents last year. My concern now, especially from the latest two analyst reports, is that Yahoo! would lower its estimates for 2006 and maybe even further. That would be bad!