Then, when Dan Rosensweig, former Yahoo COO and currently being mentioned as Yang’s possible successor, and former chief sales officer Wenda Harris Millard, left the company, they took Yahoo’s commercial intelligence with them. Norman: “The zenith of Yahoo’s relationship with advertisers was when Wenda was there. Both she and Dan had highly commercial mindsets and realized the value of the ‘big reach meeting big brand’ concept of Internet ad space. My sense is that Jerry is essentially a technology person, and a brilliant one. He’s a great guiding spirit, and could be a great chairman, but he’s not a Steve Ballmer or Dan Rosensweig or Eric Schmidt. He’s not a great CEO.”

—Yahoo’s value: Norman added that from an ad industry standpoint, Yahoo is still highly relevant to marketers and agencies by dint of its enormous reach. Yahoo has more e-mail accounts than everyone else, more impressions, more photos uploaded on Flickr, and therefore reports of its death are grossly premature. “My sense is that a new CEO can connect with advertisers and connect its product strategy.”

—Leadership vacuum: One online publisher, who didn’t want to be identified, agreed with Norman that Yahoo has enormous reach, but questioned its value. “Yahoo mail is not going to do squat for you as an advertiser. Yahoo News and other parts of the portal are interesting properties, but the leadership vacuum—which existed long before Jerry—could never figure out what Yahoo was at its core. Is Yahoo a bunch of disparate items cobbled together within an ad network model? Maybe. But how far can you take that? Whoever ends up there, it’s not going to be a quick fix. From a company strategy perspective, they’re built the same way today as they were five years ago. The next CEO will have to take it apart and put it back together.” More after the jump

—The Microsoft option: While most of the execs I spoke to say that a Microsoft takeover would be the best thing for the Yahoo shareholders, at least initially, that company wouldn’t necessarily be able to fix what’s wrong either. “Microsoft’s own content play is a disaster and a mess,” the web publishing exec said. “MSN, because it’s a portal, often is compared to Yahoo. MSN hasn’t been able to do well at things Yahoo has been able to do well, such as creating the Yahoo Newspaper Consortium.” As for what Yahoo should be looking for in a replacement for Yang, Bryan Wiener, CEO of interactive ad shop 360i, says a fresh face would help temporarily energize Yahoo’s internal and external stakeholders. The question is whether there is a long-term plan that is viable for their shareholders. More likely, Jerry stepping aside could trigger a deal between Microsoft and Yahoo. Both sides could use what the other has to offer. Microsoft needs this deal to make their advertising offerings more compelling and Yahoo may need this deal to pacify enraged investors.

—The portal problem: Although portals started making a comeback in 2006, the rise of social nets and vertical ad nets have diminished their value. And Yahoo has not been able to update its offerings adequately in order to remain strong, said Joelle Kaufman, Adify’s VP of marketing. “Yahoo is the most significant online media destination. They have to figure out how to be that in a market where advertisers are figuring out very efficient ways on reaching their target audience. Social net sites and verticals have figured out a way to keep users engaged; they’re not just passing through.”

—Yahoo DNA vs. Google DNA: As for Yahoo’s business model, Kaufman said the critique that Yahoo has not done well when it comes to “execution” of platforms—like Panama—misses the point. “It’s not execution, it’s Yahoo’s DNA that is the problem. Basically, they’re not Google and they shouldn’t have tried to go up against Google (NSDQ: GOOG). Yahoo is one of the most prominent online brands. People do spend time there, whereas no one spends any time on Google. The brilliance of Google was that they monetized every place they send you. That makes Google the best direct response solution. Yahoo creates as sticky a destination as they can. The problem is, Google is sending those users to quality mid-tail sites. So what Yahoo has to do is figure out how to use its social platforms—the e-mail, the IM, the aggregation—and be the best place for branding that it can be and not try to challenge Google as the best DR solution.”

—A math problem: In further analyzing Yahoo’s stance towards Google, GroupM’s Norman identifies how the company neglected its key proposition: figuring out how to turn its reach to important user demos in into ad dollars. “I’m not saying Yahoo should have pulled out of search. They have their place. But when you’re in the ad business and you own inventory, there is a degree to which selling your ads is an arts issue and also a math issue. The key is reconciling those. My sense is that the people directing sales believe it mostly to be a math issue. Yahoo’s principle asset is their broad reach. Instead of building substantial programs aimed at engaging advertisers and consumers, they spent too much time looking at the math of optimizing impressions.”