Yahoo CEO Yang sells out -- shareholders that is

Once again investors get left holding the bag.

Microsoft (NASDAQ: MSFT) shareholders should breathe a sigh of relief for not overpaying for an internet search company, Yahoo (NASDAQ: YHOO) where CEO Jerry Yang let his ego get in the way of handsome profits. Yang rejected the $47.5 billion offer that Microsoft put on the table. Why? Because he thought the company is worth more than $50 billion. As reported by the AP: "Clearly there's frustration," said Darren Chervitz, co-manager of the Jacob Internet Fund, which owns Yahoo stock. "I am not even sure if Yahoo cares about its shareholders because they didn't show much regard for shareholders' best interests in this process."

Yang actually thinks that a more sophisticated advertising platform is the secret sauce needed to produce a spike in revenue growth. Keep in mind that revenue grew by only 12% last year, and there is no indication that that number is going to be much higher in '08. Yang thinks that he will be able to grow revenue's by 25 percent in 2009 and 2010. Uh Huh!

I think that today's selloff in Yahoo stock will be an indication of what the public thinks of Yang's plan.

Could it be that in the long run he will be proved correct? I doubt it but only time will tell.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 5/5/08.