Yahoo should be broken up. End of story.
There are great products inside Yahoo, eg. Flickr. Some big services which are world-beaters.
The problem is, anyone big enough to buy Yahoo outright (like Google or M$) already has their own version of a lot of these ... and would have to start killing off either their own or Yahoo's.
If Yahoo isn't big or coherent enough to survive on its own, then the next best thing is to blow itself up into a number of higher value independent units. Let each go out and thrive, die or get bought on its own merits.
Unless ... of course ...
what was Cringely saying again, about Apple wanting to be in the media distribution game?