How Yahoo! Aims To Reboot

(3 of 3)

Despite its recent stock stumbles, the portal remains a diversified giant. Its sites draw more users than AOL's or Microsoft's. Among 18-to-34-year-olds, Myspace and YouTube had a combined 32 million unique visitors in December; Yahoo! had 39 million. And Yahoo!'s e-mail remains tops with 250 million users worldwide. The company is either first or second in 17 Web categories, from e-mail to photos. It also landed a deal with eBay to sell ads on the company's domestic site and engineered a partnership to sell ad space for 215 newspapers.

Related

Specials

Inside Yahoo

Panama may not be Semel's last bullet. Analysts have suggested Yahoo! could benefit from merging with AOL, a division of Time Warner (TIME's parent), or a linkup with Microsoft, which lags in search. Either deal would help Yahoo! take on Google more aggressively. One thing that won't change: the quirky Yahoo! culture. Early on, founders Jerry Yang and David Filo set up a free cappuccino bar for employees and have followed up with annual company-wide gifts, ranging from MP3 players to sleeping bags. Google has topped the coffee bar with free meals and a host of perks. But in Yahoo!'s case, staying caffeinated and hungry might not be a bad idea.