Will This Internet Veteran Make a Soft Landing or Go Splat?

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If at first you don't succeed, skydiving really isn't your sport.

Yahoo! (NAS: YHOO) is still clinging to life as a stand-alone company, trying one avenue after another to stave off a wholesale merger or buyout. According to TheWall Street Journal's typical anonymous sources, the Internet portal now wants to sell a 20% stake to private-equity firms.

Management is trying to squeeze a few more dollars per share of price premium before putting quill to parchment. Bidders are said to includeMicrosoft (NAS: MSFT) and a number of high-profile private-equity firms. Yahoo! also might sell its stakes in Chinese portal Alibaba to its China-based partners and Japanese telecom Softbank, according to the Journal.

That's like stripping your own car for parts so you don't miss the next car payment. That Alibaba holding is often seen as the best -- perhaps the only -- reason to buy into Yahoo! in the first place. Take that away, and the company would be forced to succeed on its own terms. That hasn't happened in the past few years, and the company currently doesn't even have its next CEO.

Maybe those 20% placement deals could fix that deficiency by installing a partner-picked CEO as part of the deal. But I don't know who would fit this bill at Mr. Softy's house, and alleged bidder TPG Capital has more expertise in retail and energy operations than in online business.

Silver Lake Partners, on the other hand, is an existing stakeholder in Alibaba and could turn that other asset sale on its head. The firm also holds significant stakes in Internet ventures such as Groupon (NAS: GRPN) , Skype, Zynga, and Go Daddy -- this bench is probably deep enough to give Yahoo! a decent leader. At least for the short term.

That would then force Yahoo! to find another endgame after that incubation stage, and there are no guarantees that any of this would pay off.

The way I see it, Yahoo! would be better off finding a proven online innovator that actually executes on its strategies and that could marry Big Y's enormous user list with its own business plan. Google (NAS: GOOG) comes to mind, but it would never pass antitrust scrutiny. eBay (NAS: EBAY) and Amazon.com (NAS: AMZN) are other good candidates that could find uses for Yahoo!'s massive user base while milking down its display business, and perhaps oblique enough to avoid governmental roadblocks.

But that's not what's happening here. The board and interim management handle this dealmaking process more like bumper cars than skydiving. Will the company bump and grind its way back to health, or will investors be caught 13,000 feet above the cold, hard ground without a ripcord? Click here to add Yahoo! to your Foolish watchlist, and you'll be the first to know what happens in the last chapter.

At the time this article was published Fool contributorAnders Bylundowns shares of Google but holds no other position in any of the companies mentioned. The Motley Fool owns shares of Yahoo!, Google, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Yahoo!, Microsoft, eBay, Amazon, and Google. We have also recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. We have adisclosure policy.

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