The blame game hits Yahoo!

The sun is setting on Yahoo! and management is pointing figures.

A memo from one of the companies senior vices presidents claims that the company has spread its efforts too thin, like peanut butter on bread. The memo, which has lead to the formation of a group to suggest changes at the huge internet firm, called for a large reduction in staff at Yahoo! along with extensive managment changes.

Yahoo! remains one of the largest Internet sites in unique visitors, according to ComScore, but Google Inc.(NASDAQ:GOOG) has been gaining on its older rival for several years.

The details of the memo might be debated, but the overarching theme is almost certainly correct. While Internet portals like AOL, MSN, and Yahoo! have lost popularity and revenue growth, sites that are more focused on doing a few things well -- from Google to MySpace to YouTube -- have flourished.

While Google's shares have run from a 52-week low of just over $331 to $499, Yahoo!'s have slumped from $43.66 to just under $27. Yahoo! Inc. (NASDAQ:YHOO)has done a poor job keeping up with major trends on the internet, from building large community sites to having a major presence in video.

Yahoo! is now exhibiting the kind of management issues that often occur at flagging companies. With long-time executives at odds about the big web operation's future, things are likely to get much worse before they get better.

Investors have to wonder what happened to Yahoo!'s CEO. Someone must be driving the bus.

Douglas McIntyre is a partner at 24/7 Wall St.