Maybe you can teach an old dog new tricks.

Mere weeks ago, famed activist investor Carl Icahn launched a proxy slate to rival the current Yahoo! (NASDAQ:YHOO) board roster. Yesterday, he told Reuters that the mostly dead combination with Microsoft (NASDAQ:MSFT) might not be the best way forward after all. Thanks for coming to your senses, buddy, though it is a bit late in the game.

Yahoo!'s recent advertising partnership with market leader Google (NASDAQ:GOOG) seems to have changed the game entirely. Even though the ink is still drying on the deal, the mere announcement put a 15% hurt on Yahoo!'s stock. Depending on how far Icahn got in his quest to gain leverage in the Yahoo! camp from the recent FTC clearing, his stake in the company lost between $150 million and $375 million of its value overnight. Ouch.

So the crafty investor is looking for ways to regain the value he lost, and pumping up the Google deal might just be the ticket.

I do think the Google deal was a smart move, because Google has proved that its AdSense/AdWords platform can squeeze more value out of Web traffic than can pretty much any alternative you'd care to mention. Thus, going with that solution at least in part should improve Yahoo!'s cash flow very quickly.

The critics, among them the Icahn of old, think that such a deal kills the value of Yahoo!'s own in-house ad platform, affectionately named Panama. That may well be the case, but it's a price worth paying for breathing new revenue-generating life into the Yahoo! search engine.

Guys -- forget about Panama and instead refocus your efforts on what makes Yahoo! great: a massive audience with huge social-networking potential, not to mention one of the most powerful brand names in the industry. Feel free to outsource everything that isn't core to these operating concepts.

So Icahn's flip-flop could mean one of two things: Either he's finally come to his senses and seen the light, or he's desperately trying to inflate the public opinion of a deal he doesn't truly believe in himself. But it doesn't matter. His words and actions hold the same power regardless of the motivation, so either way, current shareholders win.

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