Not many seem to seriously be considering the uphill battle and tremendous odds Yahoo is facing right now.

Pinning all hopes on MS buying them is not a very sound strategy. The economic hurdles that lie ahead for Yahoo and their new leader are as treacherous and turbulent as can be at this point. Without Google to save them, and only the extremely weak alternative of an AOL merger present, the future looks fairly bleak. The current downturn encompasses much more than a faltering economy which directly effects display ads and small businesses that finance Yahoo, for the most part. Major declines in VC and M&A prospects means big trouble for all of Silicon Valley culture, of which Yahoo is an integral part.

The stark reality of a lot less investment dollars flowing has potentially devastating repercussions in those that rely on start-ups to fuel the innovations needed for a company like Yahoo to prosper. These are the dark realities ahead that the incoming CEO has to face. Not pretty. It’s going to be easy for MS to simply hold off like this until Yahoo slips below $5 in an ongoing recession that hasn’t even swept through the tech sector in any kind of peak yet, and won’t for a few more months. After Yahoo falls out of the range where retirement investments, mutual funds and such hold onto them, it will be headed for penny stock territory. MS can then buy that search engine they want for almost nothing, removing the last hopes for Yahoo to ever recover. Then, they will simply fade away slowly, like Netscape and other footnotes in web history.

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