From today’s New York Times…

Despite contrasting opinions, analysts and stockholders of Yahoo generally agree on what ails it. And there is a consensus that if it remained an underachiever, it would be a candidate for takeover.

The main problem is that Yahoo has not been nearly as good as Google at reaping profits from the huge volume of search traffic it attracts. Yahoo’s search revenue in the third quarter was $191 million, versus $911 million for Google, Mr. Post’s report estimated.

“Yahoo touches one out of every two people on the Internet every month, which is unparalleled reach,” said Randy Befumo, co-director of research at Legg Mason, which holds some 40 million Yahoo shares in various accounts, including funds run by Bill Miller, Legg Mason’s marquee mutual fund manager. Despite the fact that Yahoo actually has more traffic than Google,” Mr. Befumo said, Google has more revenue. “So there definitely is a problem with Yahoo’s monetization.”

According to Mr. Post, who also points to this issue, each domestic search generates about 4 cents for Yahoo, compared with 11 cents a search at Google….