The key to any good parlor magic trick is misdirection. You're looking at the rotating shells, instead of the hands that are guiding them. You're eyeing the deck of cards, even though the force happened several steps ago, during the initial shuffle.

So let me go ahead and blow the mother of all illusions for you right now. Yahoo! (NASDAQ:YHOO) CEO Jerry Yang is at the midway point of a 100-day assessment of the company he co-founded and took the helm of when former CEO Terry Semel buckled.

Everyone's watching closely, and with good reason. Yahoo! has been a chronic underachiever in recent quarterly report cards. Google (NASDAQ:GOOG) is growing faster. Microsoft (NASDAQ:MSFT) and Google are making the $6 billion and $3.1 billion online advertising acquisitions, respectively.

If the misdirection proves flawless, everyone will be huddled around some late-October deadline, expecting grim or radical news out of Yang. They'll get neither. Instead, The Great Yangini will open the box, letting them know that the transformation is complete. The Yahoo! that investors will see is far different from the one that began Yang's tenure.  

The audience has been so caught up in the anticipation that they've completely missed the quick-change artists at Yahoo! executing a worthy makeover, one garment at a time. Watching Yang posing like Rodin's "The Thinker," they're missing the art unraveling around them.

From A to Zimbra
The latest piece of wardrobe came in last night's announced acquisition of Zimbra. The $350 million deal doesn't seem like much. Zimbra's strengths are in AJAX-peppered emails, an area that may seem redundant, given Yahoo!'s own update there.

There's more to it than that, though. For starters, Zimbra has to be pretty special if broadband access providers like Comcast (NASDAQ:CMCSA) and EMBARQ (NYSE:EQ) have handed Zimbra the keys to power their subscriber email platforms. These companies know that they have to compete against the snazzy freebie trimmings of Gmail, Yahoo! Mail, and MSN's Hotmail, and they've turned to Zimbra to stand out.

With Zimbra, Yahoo! is also getting a suite of collaborative Web-based applications, including group calendars, spreadsheets, and documents. In other words, if Google Apps becomes the kind of mainstream offering that merits a response, Yahoo! has one.

It's obvious that Web-based applications are important in the corporate space. Microsoft is right to be afraid of Google -- and now Yahoo! -- just as enterprise software providers are losing sleep over cheaper online solutions through (NYSE:CRM).

Zimbra isn't just making sure that Yahoo! isn't the last one mentioned during alphabetical roll call. It will make Yahoo! more like its faster-growing rivals.

That says a lot. Then again, so do a lot of Yahoo!'s recent buys, rollouts, and executive shuffles.

Thawing out the freeze-frames
You'll have gone through three pages on your monthly calendar during Yang's 100-day review. You may find yourself awestruck by how Yahoo! can go through various manifestations within a matter of days.

Let's take the past week, for example. In the time that you were fixing your gaze on a pensive Yang, Yahoo! has:

  • Announced the beta of its new Mash social network
  • Struck an ad distribution deal with the United Kingdom's leading social network, Bebo
  • Earned street cred in the music world by getting Viacom's (NYSE:VIA) MTV's high-def channel to air one of its online artist performance showcases

So don't be surprised if Yahoo! is somehow more relevant, cooler, and octane-packed than when the magic trick started earlier this summer. Moving Yahoo! from a sorry state to one that will be envied has happened in slow motion, but that's just because you were looking in the wrong place.

While rivals made single, beefy, multibillion-dollar purchases in interactive marketing, Yahoo! went for value by trading fewer greenbacks for companies like Right Media and BlueLithium.

Don't blame yourself for missing the transformation. The illusion is a good one. It's also a rewarding one.

And now for The Great Yangini's long overdue finale: the stock levitation trick.

Some Yahoo! moves that may make you believe in magic again:

Yahoo! is a Motley Fool Stock Advisor newsletter selection. Microsoft is an Inside Value recommendation. If you really want to see a cool trick, watch your portfolio levitate without risking a dime. Go for a free 30-day trial subscription to either service.  

Longtime Fool contributor Rick Munarriz is a fan of Yahoo!, cheering on its Web 2.0 comeback. For now, he does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.