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One of Silicon Valley’s longest-running stories is the plight of Yahoo, a company whose future has been doubtful or questionable for something like seven or eight years now. Here is a site that just can’t figure out how to prosper from an enormous audience, which outranks Facebook’s in the U.S. Yahoo turned down a ridiculously high buyout offer from Microsoft in 2008, tried to thrive independently under a new CEO, Carol Bartz, but then appeared to reconsider some kind of buyout or merger in recent months after firing Bartz. It’s a mess.

Then comes today’s news that Yahoo has hired a new CEO, Scott Thompson, who had been running PayPal. PayPal is an absolute machine with dreams of something like world domination. And Thompson is a technology guy, a former CIO, not a slash-and-burn operations guy who prepares companies to be sold off. So Thompson’s hiring is a statement that Yahoo doesn’t intend to fade away. I admire the instinct, even though I can see why shareholders might be disappointed. As more and more sites join Facebook’s “Open Graph” and Google expands its ambitions, the Internet is coalescing around too few power players. Yahoo still thinks it can be one of them. That struggle still might lead it to create some innovative services and fresh approaches to the Web advertising business.

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