Google the term "lame duck company" and you may find Yahoo! (NASDAQ:YHOO) on top. If not, check back later, because it's bound to happen.

Yahoo! posted another lackluster quarter last night. Revenue before traffic-acquisition costs moved just 3% higher to $1.325 billion. Earnings, operating cash flow, and free cash flow all fell over last year's performance.

Yahoo! is no longer a bellwether. If you want a real barometer, you should have been here a week ago, when Google (NASDAQ:GOOG) posted revenue and earnings growth of 31% and 26% respectively. In fact, Google's third-quarter profit of $1.35 billion is more than Yahoo!'s TAC-adjusted top line!

This is a mess. The stock may have ticked higher on the news, but it's really just an exhale of relief that Yahoo! isn't completely irrelevant by now. It's getting close, though. Yahoo! came within a mere $5.7 million of posting an operating loss domestically. How pathetic is that?

The boardroom undoubtedly knows that its days are numbered. With the stock trading well below the $31 Microsoft (NASDAQ:MSFT) buyout offer that it rebuffed earlier this year, battered shareholders will want blood by next summer's annual meeting.

All aboard the unsinkable S.S. Yahoo!
Yahoo! isn't just rearranging the Titanic deck chairs: It's also tipping the band.

Last night's conference call was loaded with growth initiatives like new ad platforms and the push to turn its Yahoo! Mail juggernaut into a social networking beast. The problem is that you're hearing stuff like this every three months out of Yahoo!, yet every quarter finds it falling further behind to Google.

So if Yahoo! knows that its execs are toast -- and head-scratching moves like the rumored hookup with Time Warner's (NYSE:TWX) similarly rudderless AOL stink of "last call" barfly desperation -- is the company even really trying?  

Nothing is as emblematic of Yahoo!'s ineffectiveness as the announcement last night that it will trim "at least" 10% of its workforce. It may seem like a move that is long overdue given the company's chunky cost structure, but with 15,200 employees, the move is really just taking Yahoo! back to where it was with 13,800 hires at the end of the first quarter.

In other words, it's really just asking the dentist to scrape away the plaque that has accumulated over the past six months instead of having its wisdom teeth extracted. I'll insert a dramatic pause here so you can fire back the obvious one-liner about Yahoo!'s wisdom already being extracted.

You are funny. Yahoo!, unfortunately, is no laughing matter.

My kingdom for a compass
There is strength in Yahoo!'s report. It's just not where you expect to find it. After all, Yahoo! has done nothing but hammer its leadership position in display advertising -- over Google's bread-and-butter search stronghold -- but display advertising is up just 3% over the past year.

Yahoo! beats its chest about how its ad-serving technologies make it an attractive draw to newspaper consortiums and third-party publishers, yet affiliate revenue actually fell by 10% during the quarter.

Where Yahoo! is growing well is in search. Yahoo! came through with a 17% year-over-year gain in search revenue on its owned and operated sites. It's a line item that finally topped display revenue on Yahoo!'s own sites.

Maybe it's time for Yahoo! to embrace its role as a poor man's Google instead of trying to distance itself with its string of display advertising-related acquisitions.

If Yahoo! was smart, it would take that $3.3 billion in cash and marketable securities on its balance sheet and go shopping. Instead of buying display ad networks, it should concentrate on high-traffic sites that draw the audiences made for paid search advertising.

With companies like wedding planning hub The Knot (NASDAQ:KNOT), interest rate watcher Bankrate (NASDAQ:RATE), and car dealer lead generator Autobytel (NASDAQ:ABTL) at rock-bottom prices, just a third of Yahoo!'s cash hoard would be enough to buy all three companies, opening up the door to more lucrative ad outlets.

Then again, lame duck companies don't do that. They sit around and hope that Microsoft comes back, they run off a few extra copies of their resumes, or they keep Googling the term "lame duck company" until they finally lead in something.

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