• ZDNet, Thursday, August 2, 2007 11 AM

Jerry Yang's reign as Yahoo CEO is yet to have any impact on the company's poor stock performance, but Bear Sterns analyst Robert Peck, in a 22-page report, has a few ideas for him.

Peck says the priority No. 1 for the ailing Web giant should be to address its woefully under-developed social-networking strategy. A recent report from the Web traffic monitor comScore says that social sites account for 60% of the world's Internet users. For a company that once thrived on its ability to attract the masses, it's unbelievable that Yahoo has failed to jump on the bandwagon. Social networks have stolen Yahoo users, particularly young users, stunting the company's ad growth.

So what is Yahoo going to do? Peck says that Yahoo "must be reviewing" social networking. It has looked into opportunities in the past, and now needs to take definitive steps in that direction to "solidify its future." Yahoo has a social network in Yahoo 360, but nobody uses it. The Web giant now needs to acquire its way back into the Web 2.0 game. But who could it afford? Even Friendster might be out of reach at this point. Bebo perhaps?

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