You have to wonder: is Jerry Yang a hero or a goat?

Forget what you think of Jerry Yang as one-half of Yahoo!’s founding team, forget what you think of Yang as the Chief Yahoo! who saw Yahoo!’s meteoric rise and devastating fall from grace.

Forget even Yang in the over-hyped first 100 days since former Chairman and CEO Terry Semel left the company in 2007 after Eric Jackson’s crusade.

Ask yourself, however: what about Yang in the past 20 or so days since MSFT launched its unsolicited $44.6B deal.

What do the stakeholders think of Yang?

- Employees
- Users
- Clients (advertisers)
- Partners (that include hundreds of newspapers, AT&T, etc.)
- Shareholders
- MSFT (inevitably the company’s parent)

are just some of the stakeholders who will be impacted in the future. Many have been impacted already.

There have been a handful of shareholder lawsuits already. We’ve also seen an exodus of staff; the same people who MSFT Chairman Bill Gates supposedly covets.

I think that Yang has - until the MSFT bid - done an admirable job; the way he’s acted since, however, has been disgraceful. While I do respect a captain wanting to be the last to get off a boat, I don’t care much for people who sabotage a boat, either.

What Yahoo! seems to be doing is bite its nose to spite its face: the recent $1-3B severance package he so generously and recklessly doled out was the last straw for me, it was also borderline criminal, akin to someone raiding the corporate coffers knowing full well the impact of the deed.

Yang owns less than 10% of the company and unlike his peers over at Google, he does not actually own any special voting class shares. He is also not the Chairman of the Board. At what point is it really Yang’s decision when his actions adversely impact millions of others?

The last executives and founders who treated a publicly traded company like their own piggy banks ended up doing time, so as a friendly warning, someone in Yang’s camp of groupies should give him some good advice.

The problem is very few people in the Valley or in the mainstream media elsewhere dare to say any of this vocally. Everyone writes gloriously about Yang 1994-2007 but they seem to forget that Yang 2008 has been a disaster. I lost any and all confidence during the Q4 2007 earnings call on January 29th where I signed off: lawyers are drafting papers for a takeover bid; I wasn’t exactly wrong.

Silicon Valley might be an echo chamber, but it does not operate in a vacuum, the lawsuits you have seen thus far are nothing compared to what will hit Yahoo! and Yang if Yang continues this charade.

The struggling Internet firm has reportedly explored alliances with Google, Time Warner-owned America On Line, and social networking website MySpace owned by News Corp.; each potential deal stranger than the other with the resulting outcome murkier for shareholders.

What I’d like to do as a Yahoo! shareholder and user is see Yang come to the realization that the company he founded has run out of options the day MSFT checkmated it with a $31/share offer; he can take some time to come to that realization, but sooner or later, the energy he is spending on dead ends and potentially litigious pursuits he should be devoting on how to maximize the final sales price MSFT is willing to pay, how best to mitigate any risks and integrate the companies.

At this rate, however, it won’t be too late before Yang is pulled from the mound to make room for someone who understands the stakes in the game.

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