Yahoo Inc. One of the early sensations of the Internet age, Yahoo has become a collection of Web sites that serves more than 700 million people, doing business in more than 20 countries. It is the Web’s fourth largest site; only Google , Microsoft and Facebook are larger. Yet, despite its huge audience and its dominance in online news, sports and finance, Yahoo’s future is in doubt . Potential buyers have been circling to pick up parts — or perhaps the entire company — since the messy firing in September 2011 of Carol A. Bartz , Yahoo’s former chief executive. For years, Yahoo’s board has been pilloried for a parade of missteps, including ceding ground to upstarts like Google and Facebook and failing to sell itself to Microsoft in 2008. Following the resignation of Jerry Yang, Yahoo’s co-founder, the company tried to revive the troubled brand by announcing in February 2012 a major board shake-up, replacing nearly half of its directors. The company also named a new chief executive , Scott Thompson, former president of PayPal. But, in early May, Mr. Thompson’s job came into question, when Daniel S. Loeb, a Yahoo shareholder and the director of the hedge fund Third Point, accused the chief executive of inaccurately stating his academic credentials and demanded his dismissal. Mr. Loeb said that Mr. Thompson claimed degrees in accounting and computer science from Stonehill College in Boston, but Mr. Thompson earned only an accounting degree, since Stonehill did not offer degrees in computer science by the time he graduated. On May 12, Mr. Thompson stepped down, after just four months on the job , sending the flailing company into limbo once again. Mr. Thompson will be replaced on an interim basis by Ross Levinsohn, Yahoo’s global head of media. Alfred Amoroso, the director in charge of an internal inquiry into Mr. Thompson’s record, will become the company’s new chairman. The decision is meant to move Yahoo past one of the most embarrassing episodes in the Web pioneer’s history as the company tries to revitalize itself. Mr. Thompson’s departure also signifies a victory for Mr. Loeb, who had waged a bitter proxy fight to get his nominees onto Yahoo’s board. Under the terms of the settlement, Mr. Loeb will gain a board seat, as will two of his designees, Michael J. Wolf and Harry Wilson. Job Cuts Ahead of a Restructuring In April 2012, Yahoo said that it would lay off 2,000 employees, or about 14 percent of its workforce, as part of a broader restructuring effort. The layoffs are part of a reorganization under Scott Thompson, Yahoo’s former chief executive. Mr. Thompson told Yahoo’s remaining 12,000 employees that he was restructuring the company around three core groups: “consumer, regions and technology.” The consumer business will include media properties, commerce businesses like Yahoo Travel and Yahoo Autos, and social media properties like Flickr. Yahoo employees and investors have been waiting for the company’s management to address its decade-long identity crisis, during which five chief executives were dismissed in five years. With 700 million visitors, Yahoo still maintains one of the largest audiences on the Web, but has been unable to increase revenue. The company continues to cede advertising market share to competitors, notably Facebook and Google, and has frustrated shareholders with its reliance on cost-cutting rather than new areas for innovation and growth. Based on the restructuring, it appeared Mr. Thompson planned to hedge much of Yahoo’s future on the media and content properties it hopes will tether visitors to its site and lure back advertisers, as well as on the data it has on its users. Sources inside the company said that it was unclear how the company would leverage the information to its advantage. The company is also engaged in a patent dispute with Facebook. Yahoo sued Facebook for alleged patent infringement in March, which prompted Facebook to file a countersuit in April. Facebook’s suit claims Yahoo violated patents responsible for some 80 percent of its revenue in 2011, or more than $4 billion. Talks With Asian Partners Collapse During the fall of 2011, the board entertained multiple offers from a broad swath of suitors. In late November, the company was leaning toward the sale of a minority stake to private equity suitors. Separate investor groups led by Silver Lake and TPG made bids to acquire stakes of roughly 20 percent. By late December, the board seemed to be leaning toward a sale of its Asian assets in the Alibaba Group and its Japanese affiliate back to their majority owners in a complicated tax-free deal valued at about $17 billion. But in February 2012, those talks collapsed . This sudden development raised new questions about the future of Yahoo, which had counted on completing the deal to raise billions of dollars to reshape its operations. It also put additional pressure on Mr. Thompson to provide a clear vision of what the new Yahoo would look like. Yahoo had been counting on financing the transformation, at least partly, by reaping billions of dollars from selling back most of its 40 percent stake in Alibaba of China and all of its 35 percent stake in Yahoo Japan. But the talks to put together a tax-free transaction ended on Feb. 13, after several days of negotiations in Hong Kong, according to people briefed on the matter. Yahoo and Alibaba, which is led by Jack Ma, had tried to reach an agreement over Yahoo’s stake several times before, including in late 2010. And Alibaba and Softbank, Yahoo Japan’s majority owner, planned to reach out to Yahoo in hopes of reaching an alternative deal, including one that was taxable, according to a person briefed on the matter. A taxable stake sale would bring in far less money for Yahoo, though it would at least provide some additional capital to back Mr. Thompson’s turnaround campaign. Partnering With ABC Yahoo is known for its portfolio of media sites. In October 2011, the company announced that it had partnered with Walt Disney’s ABC unit to showcase articles and videos from ABC News, and to create a co-branded Web site for “Good Morning America.” But the Yahoo sites also suffer from symptoms infecting the rest of the company: shifting priorities and a shortage of innovation. Yahoo has another problem too: a lack of respect, not only from an indifferent public, but also from advertisers and investors, who grew impatient waiting for the turnaround promised by Ms. Bartz, who became chief executive in 2009. When Ms. Bartz was hired, she replaced the company’s co-founder, Jerry Yang, in the uncertain aftermath of a failed takeover attempt by Microsoft in 2008. As chief executive, she moved aggressively to focus on Yahoo’s strengths in news, sports, finance and entertainment and on increasing revenue from online display advertising. She engineered a deal that turned over its search operations to Microsoft, but that failed to live up to expectations. After Ms. Bartz’s dismissal, Timothy Morse, the company’s chief financial officer, was named interim chief executive. Yahoo’s problems are not the kind that are easily fixed. Over the years, various people in charge have neglected to develop the new social networking tools , video services or mobile apps that consumers now prefer to use. In that way, the tale of the company’s misfortunes is a vivid illustration of the transition from Web sites that publish professional content to a new digital world dominated by mobile phones and sites where the users are the content creators. Yahoo astutely capitalized on the first huge shift in how people read — moving online from paper — but failed to follow Internet users and advertisers to cellphone screens and social networks. It has tried to become a media company. Meanwhile, the next generation of companies, like Google and Facebook, have happily satisfied the demand for information and entertainment — not by creating content but by building mobile and social networking services that attract users and, increasingly, valuable advertisers. A Directory of Interesting Web Sites Jerry Yang and David Filo founded Yahoo in 1994 while they were Stanford University graduate students. Yahoo was at first a handmade directory of interesting Web sites. The site quickly evolved into the first and biggest Web portal. It offered pages on a range of topics — news, sports, music and so on — mainly organizing content created by other sites. And it offered services as well, like e-mail and instant messaging. While many people saw Yahoo as a place to search the Internet, it originally did not operate its own search engine. Instead, it used search from companies like AltaVista and later Google. Indeed, Google got much of its early traffic and credibility from its initial support from Yahoo. The company ran into trouble when the Internet bubble burst in 2000 and 2001. Its share price collapsed; it laid off employees, and it replaced its chief executive, Tim Koogle, with Terry S. Semel, a former Warner Brothers executive. Mr. Semel tried to diversify the company into fee-based services and online commerce. But it was Yahoo’s advertising business that came roaring back, attracting marketers because it had the largest audience on the Web. By December 2002, the company acquired Inktomi, a search engine provider. And in 2003, it bought Overture Services, which sold search-related ads. With those two companies, it began to compete head-on with Google, both as a search engine and in the search ad business. Google, however, continued to gain an increasing share of the search and advertising markets. And Microsoft decided to enter those areas as well. With pressure on Yahoo building, Mr. Semel resigned as chief executive in June 2007. Mr. Yang took over the top management spot and appointed Susan Decker, a former Wall Street analyst, as president. The company continued to retrench and disappoint investors. In January 2008, it said it would cut 1,000 of its 14,000 jobs. An Enemy Turns Friendly: Microsoft Microsoft made a $47.5 billion hostile offer to buy Yahoo in 2008 after on-and-off talks about a merger led nowhere. After a bruising four-month battle, Microsoft abandoned the offer. Anger among Yahoo shareholders led to a management change and the replacement of Mr. Yang with Ms. Bartz, an outsider. A tough-minded technology executive and founder of Autodesk, Ms. Bartz had a reputation for decisiveness. The board appeared to signal that Yahoo would undergo the kind of drastic change that many investors had been clamoring for. In 2009, Yahoo handed over its search engine and related advertising to Microsoft, its one-time search nemesis. The deal, forged by Ms. Bartz, allowed Yahoo to focus on display advertising — banners and other graphical ads — where it remains the industry’s leader. In addition, the terms of the 10-year agreement with Microsoft provided Yahoo with a lucrative 88 percent of the search-generated ad revenue from its own sites for the first five years, much higher than is standard in the industry. Microsoft agreed to provide the underlying search technology on Yahoo’s popular Web sites through Bing, its search engine. Getting People to Stick Around Online The deal with Microsoft brought revenue to Yahoo. But overall, revenue growth at the company has been disappointing. In the first six months of 2011, revenue from display ads was essentially flat, at $1 billion, while the online ad industry grew at about 27 percent. Yahoo’s problem is that Internet users are spending a bigger portion of their time with Yahoo’s competitors. The percentage of time users spend on Yahoo is down a third from its high three years ago, while the share of the time spent on Facebook has catapulted more than sixfold over the same period, according to the measurement firm comScore. Yahoo is putting its money on original content to get people to stick around longer. The model is Yahoo Sports. Over the last few years, sports, more than any other Yahoo media site, bet big on original coverage by hiring reporters and writing original articles. Yahoo Sports also produces a number of online video shows, including game highlights and Fantasy Football Live. Partners like ABC will also provide shows, helping keep costs down, according to Yahoo executives. And Yahoo will continue to produce its own online shows, they say, believing that professionally produced video appeals to advertisers more than the skating dogs and off-tune singers on YouTube. Yahoo tried to acquire Hulu earlier in 2011, sources said. It is unclear whether Yahoo’s board plans to press ahead amid the distraction of a strategic review of its business and a potential sale of all or parts of the company.