Ask HN: How would you save Yahoo and bring it back to top place ?

Spot on. Focus on nothing else but this initially. Remember Carol Bartz's answer to "What is Yahoo?"?

    "What is Yahoo? Listen Yahoo is a great company that is very, very strong
     in content for its users, uses amazing technology to serve up what increasingly
     we think is going to be the web of one. For instance, on our today module in the 
     front page, every 5 minutes we have 32,000 different variations of that module. 
     So you don’t even know what I’m seeing in fact we serve a million different front 
     page modules a day and that’s just through content optimization. And that’s just 
     the beginning. Customized because we know the things you’re interested in. Maybe 
     you don’t like light entertainment maybe you like a certain sports team, etc. And 
     our click through rate went up twice. So the point is, people come to us to find 
     out what is going on with the world in a very nice quick fashion to do their 
     communications, email, messanger, check-in on their teens. We all know about 
     Yahoo finance. It’s a places where you can just get it together. It’s collated 
     for you, it’s all the things as you’re moving, you can even get your social 
     information there. Everybody moves through many websites in a day, Yahoo is one 
     they always stop at."

Link: http://techcrunch.com/2010/05/28/ok-seriously-what-is-yahoo/

Otherwise, a seriously minimalistic ui overhaul is in order.

Allow Square to operate separately, making Keith Rabois CEO of Square and put Jack Dorsey in charge of revitalizing the rest of Yahoo.

I think Yahoo's suite of verticals with the traffic that Yahoo has, if done right, could be the biggest asset for Yahoo and the closest thing to a unique asset that they have. So as a portal, Yahoo links to a lot of vertical services currently (Monster for jobs, Match for dating) or has there own owned-and-operated subsidiary (finance, autos, flickr).

Find ways that the verticals can be improved and invest heavily to do so. Preferably re-create verticals that are currently outsourced, but be patient with doing so. Be willing to shrink margins in the short term to gain market share. What is needed for each vertical will be different, but I imagine there is room for innovation and improvement in each. A lot of personnel changes will probably have to be made. The CEO (for this example Jack Dorsey) will need his cadets that he trusts to run the different products. I think a similar org-chart to Google's reorganization makes sense...a few people at the very top and then put someone in charge of each product and give them a lot of responsibility.

I think it may be possible to provide a rich and effective user experience so that overtime users would go directly to a Yahoo vertical instead of searching on Google or Bing/Yahoo. Also, Yahoo could then place some results from their vertical properties on top of the Yahoo search results to better serve Yahoo users (if they can actually do the verticals right). This could be a very interesting twist on search and a differentiator. It would be a risk, but I think something like that is needed to have a fighting chance to grow search market share which is currently at 17.9% and makes up 53% of Yahoo's revenue.

I wonder WWSJD? In Steve Job's 1997 keynote when he returned to Apple, he talked about vertical integration being the biggest strength of Apple, even though many others considered it a burden and a weakness. He admitted that many current Apple products sucked and that they needed to improved dramatically improve core products and kill off others in order to be competitive. He admitted the importance of integrating more tightly with Microsoft and didn't want to think of the situation as being Apple vs. Microsoft.

For Yahoo, their nearly complete suite of vertical products is potentially their biggest strength even though many consider it a burden and weakness. Yahoo has to admit that a lot of their products currently suck and will need to kill some off while dramatically improving others. Yahoo already admitted that they couldn’t cut it in the resource intensive search game and got out.

I know it sounds crazy, but maybe the portal can make a come back. SEO spammers have dramatically lowered search quality in certain areas and has made it harder for people to find the content that they really want to find. A portal can make it easy for the average web user to find what they looking for with a higher signal to noise ratio by a combination of high-quality curated content, vertical sites and a Bing-powered search engine with a Yahoo twist.

In reality, I don't know whether Yahoo really has the assets, the cachet or the people needed to pull off this turn around. If I was on the board, I would seriously consider a buy out offer if a sweet enough one came to the table. That being said, this plan would be a whole lot more fun to see being played out.

I have the feeling that Yahoo services are way overlooked, at least in my circle of devels.

If I had to narrow the target down, I would start by focusing strongly on Geo(location|tagging|aware) services.

I used Placemaker (http://developer.yahoo.com/geo/placemaker/) at a previous company I worked for and it was not just the best tool for the job but basically the only viable option to bootstrap our use case (MetaCarta was great too, but with an higher cost).