Yahoo!'s (NASDAQ: YHOO) second-quarter earnings release, which was issued after the bell on Tuesday, didn't go over so well. Sales declined 13%. Adjusted earnings were 16 cents per share. That means that there was zero per-share profit growth on the bottom line. To add insult to injury, adjusted operating cash flow declined 10%.

In terms of expectations, Reuters is reporting a beat of two pennies based on Yahoo!'s reported income of 10 cents per share. No one really cared. The stock sold off in yesterday's after-hours session, losing over 3% of its value. This was on top of losing 1.5% during the regular trading session. A lot of shares were traded yesterday, too.

Last week it was announced that the long-anticipated separation of AOL from Time Warner (NYSE: TWX) is set to happen before the end of the year -- then what?

If all goes well, AOL will set its own course sustaining what's left of its internet prominence, after falling from what was once internet dominance before its merger with TWX, and the continuous contraction of its dial-up subscriptions.

AOL still attracts more than 100 million Internet users to its online content portal, which includes BloggingStocks, so the adventure will continue. And, an AD-venture it is sure to be.

The same is true for Time Warner, the world's largest media conglomerate with operations spanning film, television, cable TV, and publishing. It will have an AD-venture of its own.

Yahoo! (NASDAQ: YHOO) will be reporting earnings for the third quarter on Tuesday, October 21. The internet portal hasn't had a great year so far. According to data at Earnings.com, the company hasn't seen too much in the way of bottom-line growth. And the stock is, as of this writing, at the low end of its 52-week range. Of course, just about all stocks are having a rough time this year. Then again, Yahoo! could have avoided all this misery and just allowed itself to become assimilated into the Microsoft (NASDAQ: MSFT) culture. Poor CEO Jerry Yang. What was he thinking?

The call is for Yahoo! to post at least $0.09 per share for the bottom line. It would be nice if management could go beyond those expectations, since the company posted $0.11 per share in the year-ago period. Yahoo! really needs to show the market that it can stay relevant and keep up with the likes of Google (NASDAQ: GOOG) and Time Warner's (NYSE: TWX) AOL. Google recently booked a quarter that went well beyond the thinking of analysts. Yahoo! has a relatively decent history of beating earnings expectations, but it did miss the call last quarter, according to AOL Finance. So there's going to be a lot of pressure on Yang to perform.

Of course, let's be honest. The earnings, in the big picture, don't really matter. Yahoo! is essentially, in the minds of many, still an arbitrage play. In fact, Tobias Buckell recently commented on this subject. There are a lot of investors out there who would like to see Microsoft CEO Steve Ballmer come back to the table to begin a new round of negotiations for a takeover of the portal. I, for one, wouldn't want to see that. Does Microsoft really need the headache of integrating the web company's brand assets with its own? No. However, looking at it from the perspective of a Yahoo! shareholder, I obviously see why a buyout would be attractive. That might be the only way for the stock to command any premium these days.