Yahoo has admitted defeat, under the guise of openness. The company will start letting Google sell ads on Yahoo search results, generating as much as $800 million a year for Yahoo; the increase comes from Google's superior efficiency at matching ads to search queries and milking money from advertisers. Intriguingly, the reason Yahoo gave for ending talks with Microsoft was that Web search was integral to its business. Search may be, but not the ads that run alongside search?

The inconsistency seems foolish. Yahoo plans to "blend" Google ads with its search results, as well as its own search ads — suggesting it will keep its Panama search-advertising platform alive, for now. Yet outsourcing the bulk of its ads to Google, as Yahoo must do to realize its hoped-for revenues, will starve Panama of the volume of data it needs to continuously refine its ad-placement algorithms. One wonders if this has anything to do with Usama Fayyad's departure. As Yahoo's chief data officer, he must have understood better than everyone the devil's bargain Yahoo made in this Google pact.

(Illustration by dannysullivan)

Fayyad, a commenter tells us, is planning to return to Microsoft, where he worked before Yahoo. Had Microsoft's bid for Yahoo succeeded, he likely would have been welcomed back; now Microsoft is getting him much more cheaply. (Bassel Ojjeh, who worked with Fayyad at Microsoft and several startups before joining Yahoo, will be promoted to fill Fayyad's spot, a tipster tells us — but how long will he stay without Fayyad?) Weiner is taking temporary gigs with two venture-capital firms — a likely prelude to a CEO job somewhere. If he ever entertained that ambition at Yahoo, he was clearly thwarted by Sue Decker.

Kara Swisher thinks that another reorganization is coming at Yahoo, one which would not have Weiner directly replaced by one of his underlings. That makes a sort of sense, at least in being predictable. Yahoo is famed for its perpetual reorgs, and a pending reshuffle would explain why Yahoo still hasn't said anything publicly about Fayyad and Weiner's exits. This next one, Swisher thinks, would put Decker ally Hilary Schneider higher up the food chain, and undo a split between Yahoo's sales and product groups — one that Decker herself instigated, in a push to move from her previous job as CFO to an operational role.

What will this accomplish? “It would be nice to have sales in the room now, as we develop services, instead of totally separate,” a Yahoo executive told Swisher. Nice, but not game-changing; rather, it would simply undo a mess Decker made on her way up.

A whole lot of noise, about a whole lot of nothing. Silicon Valley is built on the idea of change — but not change for change's sake. Developing new products, not new org charts, is what excites people here.

Even Zawodny, a longtime Yahoo loyalist, the type of person who describes himself as "bleeding purple," is leaving to do a startup. I believe him when he says his departure has nothing to do with Microsoft or Icahn. But it has everything to do with Yahoo.

Jerry Yang, CEO He'll be a large Microsoft shareholder after the deal goes through, so it's likely he'll get a board seat. And perhaps he'll get to keep the "Chief Yahoo" title.

David Filo, cofounder Might be named a Microsoft Fellow, working in datacenter operations — as he prefers.

Sue Decker, President Gone. There's no position Microsoft can give her that will suit her ambitions. Not to mention the hash she's made of things at Yahoo.

Blake Jorgensen. CFO Gone. Microsoft doesn't need another CFO, and he's a close Decker ally.

Ari Balogh, CTO Bad timing: Balogh just left VeriSign for Yahoo this week. If he'll settle for a title below CTO, Microsoft might grudgingly make room for him.

Marco Boerries, EVP, Connected Life Gone. He's widely disliked within Yahoo, and Microsoft already has plenty of mobile dealmakers.

Michael Callahan, General Counsel Gone. First, we fire all the lawyers.

Gregory Coleman, EVP, Global Sales Already announced his "retirement." Even more gone than he already was.

Usama Fayyad, Chief Data Officer A keeper. Microsoft needs better data analysis.

Qi Lu, EVP, Engineering Search A keeper.

Michael Murray, Chief Accounting Officer Gone.

Jill Nash, Chief Communications Officer Could stay. Microsoft desperately needs better PR in the Valley.

Ash Patel, EVP, Platforms and Infrastructure Division Gone. He's already checked out, insiders say, but it will take a takeout to dislodge him from his desk.

Libby Sartain, Chief People Yahoo Already rumored to be out.

Hilary Schneider, EVP, Global Partner Solutions Could stay, though she's a Decker ally. Microsoft lacks credibility with newspapers, Schneider's strong suit.

Jeff Weiner, EVP, Network Division Gone. Weiner, a Semel guy, has managed to hold onto his job against the odds. But he's not respected in Redmond.