Yahoo! has to decide its course, then pick a chief

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: Microsoft as competitive threats that increasingly seek to broker the sale of ads in all media formats, and in some cases to help advertisers create their own Internet spots.

Yahoo!, on the other hand, remains a largely unthreatening friend. “The ad community doesn’t want another big Internet player sitting in the hands of someone that competes with them,” said Mike Leo, the chief executive of Operative, a digital advertising technology firm.

To avoid deals that would break up Yahoo!, a new chief executive would need to finally tackle some of the well-chronicled cultural problems that former employees said seemed to get worse under Yang.

They include a climate of indecision, constant, interminable meetings and widespread overlap of responsibilities. The new chief executive will also have to deal with a legacy of head-scratching management moves—like Yahoo!’s announcement last month that it would lay off 10% of the company but only announce who was being cut in December. That put Yahoo! employees under a two-month cloud of uncertainty.

Whatever the Yahoo! board decides to do, it still has some considerable assets with which to work. The company still attracts 500 million users a month, is the leading Web email service, and has many other profitable Internet franchises in news, sports and video.