Yahoo is stuck in a never ending drama vortex

An activist hedge fund threatening a bitter battle, a high-profile CEO under fire, acquisition rumors, and non-stop media coverage.

Welcome to Yahoo in 2015.

Or 2012. Or 2009. Or 2007.

More than any other internet company, Yahoo stands out as a perennial hotbed of intrigue, dysfunction, and fascination.

Perhaps the fact that Yahoo is the oldest web company still in business has something to do with it. Founded 20 years ago by Jerry Yang and David Filo as a directory to help people navigate the then not-so-vast but very unfamiliar world wide web, Yahoo was a high-flyer during the first dot-com boom.

But it's been a long time since the company was viewed as an innovator or leader. Instead, Yahoo has been stuck in a turbulent and seemingly never-ending quest to revitalize its revenue and to regain its cool-factor among fickle web surfers. In the process, the company has damaged the reputations of a succession of CEOs, attracted a string of cut-throat activist hedge funds, and lost ever more ground to rivals such as Facebook and Google.

Here's a recap of the most dramatic moments in Yahoo's topsy-turvy history:

Jerry Yang vs Microsoft: 2007-2008

After a string of poor results, Yahoo cofounder Jerry Yang took over as CEO in 2007, replacing Terry Semel, a former Warner Brothers executive who had presided over Yahoo's waning fortunes during the previous six years.

But Yang's comeback went off script fast. In January 2008 Microsoft made an unsolicited $44.6 billion cash-and-stock offer to buy the company. The offer represented a hefty premium from Yahoo's stock price at the time, and Microsoft sweetened the bid by an additional $5 billion.

But Yang said the price was too low and would not sell for anything less than an additional $5 billion, forcing Microsoft CEO Steve Ballmer to call off the deal talks.

Later that year, the housing bubble burst and the stock market crashed, setting off the deepest recession in the U.S. since the Great Depression of the 1930s. Yahoo's stock crashed, and by the end of the year the company was worth less than half of what Microsoft had offered to pay. Speaking of the scrapped deal, Ballmer later said "Sometimes you're lucky."

Enter Carl Icahn: 2008 - 2009

The activist investor amassed a 4.3% stake in Yahoo and begins a campaign to replace Yahoo's board of directors in the hopes of installing directors more amenable to striking a deal with Microsoft. In August 2008 Yahoo gave Icahn a seat on its board as well as the right to appoint two other board members.

Yahoo also tried to fend off the threat of a hostile Microsoft takeover by striking a search advertising deal with Google, but the U.S. Department of Justice said it would sue to block the deal, so Google backed out of the plan.

The Carol Bartz Show: 2009 - 2011

Yang's rejection of the Microsoft acquisition offer put him in the doghouse with Wall Street, and the cofounder clearly did not relish being in the spotlight and leading the company day-to-day, so he stepped aside and Yahoo brought in Carol Bartz.

Bartz, the former CEO of software company Autodesk, had a sterling reputation as a take-charge tech CEO, even though she had no experience leading an internet media company. Known for dropping f-bombs, Bartz promised that any partnership with Microsoft would require "boatloads of money."

Then she struck a 10-year search partnership that left many people thinking that Bartz got the short end of the stick.

Yahoo's revenue continued to sputter under Bartz. But the bigger problem was Bartz' increasingly strained relationship with Jack Ma, the head of Alibaba, the Chinese ecommerce giant in which Yahoo owned a significant stake.

In September 2011, Bartz was fired over the phone and replaced by CFO Tim Morse on an interim basis. Private equity firms started to circle around Yahoo looking for deals to acquire minority stakes in the company.

Scott Thompson and resume-gate: January 2012 - May 2012

In perhaps the most bizarre episode in the Yahoo saga, former PayPal President Scott Thompson rolled his sleeves up to whip Yahoo into shape at the start of 2012. He lasted about four months.

Thompson had big ideas for how to revamp Yahoo's business. But Third Point, another activist hedge fund that had amassed a big stake in Yahoo, had its own ideas - and Thompson was not part of its plan.

Things came to a head in May when Third Point's Dan Loeb accused Thompson of falsifying his resume, showing that he claimed to have a degree in computer science from a college that did not offer such a degree. (Thompson blamed the error on a headhunter which passed a document with the inaccurate information to a previous employer.)

Within less than two weeks, Thompson was out and Loeb had secured three seats on Yahoo's board of directors.

Thompson also made the fateful decision to sell 20% of Yahoo's stake in then-private Alibaba. That deal effectively cost Yahoo $54 billion - greater than the entire value of the company today.

A new hope, the Marissa Mayer years: July 2012 - Present

Loeb's next move was to hire Marissa Mayer, one of Google's first engineers, as Yahoo's new CEO. The hiring was praised as a coup, and it immediately gave Yahoo the kind of buzz it hadn't had in years. With Mayer, the thinking went, Yahoo had a visionary CEO with the product chops to re-invent the company and the reputation to recruit more engineering rock stars.

Mayer quickly shifted Yahoo's focus to mobile, an area where it had been sorely lacking. But her plan suffered a big setback early on, when she was forced to fire Henrique de Castro, a former Googler that she had hired only 15 months earlier with a jaw-dropping $58 million pay package.

DeCastro had failed to meet sales goals. But two years later, Yahoo's revenue remains stuck in a rut. And Mayer's strategy has been criticized for being unfocused. The company has not created any hit products during her tenure. It's made almost 50 acquisitions, including big ones like social blogging platform Tumblr ($1.1 billion) and video ad tech company Brightroll ($650 million), with no obvious payoff yet. And it's invested in a questionable media strategy, including original video programming like the Community series, which it recently wrote off.

Once again, Yahoo is dealing with an activist investor. This time the agitator is Starboard Value. The firm wants Yahoo to abandon a plan to spin off its remaining 15% stake in Alibaba, and to instead sell its core internet business. Mayer and the board have spent the past several days deliberating the various options.

Whatever happens, it's sure to be interesting.