Yes, first on CNBC… Cramer says Yahoo is a buy, buy, buy… Yahoo could not perform even when the online advertising market was sizzling… so why should we believe it now… given the beating that advertising has taken, and the facts that ads accounted for over 87% of the companies revenues in 2008... I have not one but two reasons…

First, Yahoo finally has a CEO with a great track record… someone who knows how to execute… and is guiding the company with a firm hand… and that persons name is Carol Bartz… and second there are mounting signs of a bottom in advertising… even the beginnings of a turn… especially on the web… long term the trend of advertising money migrating away from the traditional media, and onto the internet is one of the best stories out there… but the old, clumsy, inept Yahoo was unable to take advantage of the shift… with the stock at $14.78, the new CEO, and a recovery ad market… I think that Yahoo actually has the potential to make some serious money… on earnings… not take out.

The evidence of a bottom in advertising is for real, and that bottom has to hit before we can own a stock like Yahoo… Time Warner has said that so far in the second quarter, AOL’s ad revenues are declining compared to the previous year, but at the same pace as in the first quarter… okay, I call that stabilization… how about on Disney’s conference call earlier this month, we heard Cramer fave Bob Eiger say that advertising was stable… how about CBS, it said that it was seeing early signs of improvement in the advertising market… AIC Interactive, which owns a hodge-podge, a pastiche, if not a mosaic of different web properties, reported that advertising volumes in the last few weeks of the first quarter in April were modestly better than they had been earlier in the quarter… and said that they did not expect any further deterioration in advertising… News Corp told a similar story, issuing guidance that assumed no further weakening in the ad market… and most important when it comes to Yahoo, News Corp CEO Peter Shurnin, and this is what turned me and made me want to do this piece… what did Shurnin say, he said that ads for MySpace, he said that we are actually seeing some signs that things are improving… our May pacing for MySpace is up certainly over April, but also over last year… that was one of those things, that was like a stop trading moment… what is good for MySpace should also be good for Yahoo… if Yahoo could finally get their act together… and I think they can under Carol Bartz… and do not forget, all of this is on top of a long term move that should see the internet go from taking 10% of world wide ad spending in 2008 to 15% in 2011... a 50% increase over two years, I think that it will ultimately double again in four more years.

The real question is if Yahoo finally has what it takes to capitalize in that shift and the bottom in advertising… and for the first time in years, I think the answer is a resounding yes… here I am banking almost entirely on Carol Bartz, the CEO who took over in January… I wanted to give her a little window, give her 4 months, okay, I did not want to press the bet… but my sources indicate that she is proving to be every bit as bankable at Yahoo as she was Auto Desk, she spent 14 years as the CEO of Auto Desk, which makes computer aided design software… and from the day that Bartz took over at the beginning of 1992, to the day before her replacement was announced January 17th, 2006, Auto Desk stock increased by 997%… 997% under Carol Bartz, Auto Desk… NASDAQ and the S&P were only up 295% and 209% in the same period… I call that a fabulous record… and Bartz has already started to take Yahoo in the same direction.

Last quarter she reduced Yahoo’s head count 100 trim, now remember head count reductions are Wall Street speak for getting rid of employees… not some kind of bizarre head hunting ritual… and Bartz announced an additional 5% plan reduction in April and May… cut back on sales and marketing spending as well as the cost, without hurting the business… and again, this is what I know, she has not hurt the business… in April, Yahoo’s web search users grew at a 14% clip year over year, even faster than Google… and pagers were up a solid 26%, virtually the same rate as Googles… it is happening people… it is happening… with traffic returning, leaner operations, and some stabilization in the ad market, Bartz has put Yahoo in a position to really snap back when advertising begins to truly improve.

Balance sheet… sitting on $3.4b in cash, $2.45 a share, with minimal debt… how about adding in the value of its holdings in Japan, China and Korea… the stock begins to really look cheap… at the end of the first quarter Yahoo’s direct and indirect interest in the publicly traded stocks of Yahoo Japan, Alibaba, and GMarket totaled $6.8b… $5 a share…. so lets back out the cash, lets back out these holdings… and you are left with the market valuing Yahoos actual business at less than $7.50 a share, about half the current price… just think, for $7.50 you could become the second biggest player in an internet ad market that has stabilized and is taking billions of dollars away from magazines and newspapers… and remember, there was a time when Microsoft was willing to pay $31 a share, more than double… more than double of where it is right now… a 62% premium of where Yahoo traded before Mr. Softie made the offering… at the time management was dumb enough to say no… but I doubt Carol Bartz would ever pass up that kind of deal.

Here is the bottom line…