In a few hours, the story … was viewed over 200,000 times and attracted over 350 comments. Now that’s a lot of traffic — but more importantly, a gigantic amount of engagement displayed by Yahoo visitors. The traffic sent our way by Yahoo was many times the traffic we get from, say, Digg or StumbleUpon.

As Om notes, it’s not so much the sheer volume of traffic that is impressive, but the engagement of the audience. Even during the biggest Digg storm or Stumbleupon flood I’ve ever experienced, I’ve never gotten more than a handful of comments. As beaten-down as it is, Yahoo still gets a ton of traffic — but Om is right that it needs to find better ways of taking advantage of and leveraging that traffic, instead of just trying to go head-to-head with Google. Should it sell off its search arm to Microsoft? Perhaps. At least then it could concentrate on what makes it different from Google, instead of trying to duplicate it.

The latest twist is that Microsoft and Carl are apparently still working on a takeover deal for the company. Icahn has sent a letter to Yahoo — and Microsoft has released its own similar statement — saying the two would be happy to discuss a takeover of some kind, but only if Yahoo’s current board gets the axe — the implication being that either the company gets rid of them, or Carl’s alternate slate is voted in at Yahoo’s annual meeting. In both statements, the potential for a full takeover is outlined. Microsoft’s release says that following a replacement of the board, it would

“be interested in discussing with a new board a major transaction with Yahoo!, such as either a transaction to purchase the ‘Search’ function with large financial guarantees or, in the alternative, purchasing the whole company.”

This is the first official recognition (to my knowledge) that Microsoft would still be interested in purchasing the entire company, after repeated protests a month ago that it no longer had any interest in doing so. Has Yahoo’s ever-declining share price made it more attractive again, or was the Yahoo board really that much of a barrier to doing a deal? Perhaps a little of column A and a little of column B. In any case, a takeover appears to be a possibility again — and shareholders are growing hopeful again, to judge by the uplift in Yahoo’s stock. Will that be enough to force the board’s hand, or to push shareholders to do so at Yahoo’s August meeting? Some might be glad just to have the ordeal over with.

Meanwhile, Yahoo is apparently talking with AOL again about some kind of merger in an attempt to prove that it can make it without Microsoft’s help. Call it “Merger of the Living Dead.” As my friend Howard Lindzon describes it, this is like “watching three horse and buggy carriers get together and worry about trains and automobiles by merging and saving on hay.”

Update: In a statement in response to Icahn’s letter, the Yahoo board says it would be happy to talk about a deal if either Microsoft or Carl want to make one — the implication being that all this talk about the board is just a side-issue designed to push Yahoo’s share price down even further and create a more inexpensive deal for Microsoft. Meanwhile, Kara Swisher reports that a major Yahoo investor has told Jerry Yang that he’s ready to vote for Microsoft in August.

In any case, whatever the truth of these specific rumours, I — like Kara — continue to believe that a Yahoo purchase makes sense for Microsoft, and that the two should talk. And I think that the longer Yahoo’s stock price remains under pressure (which it seems likely to do, given all the executive departures and general deck-chair rearranging that is going on) the more the software behemoth will want to own it and the more likely a deal becomes.

According to commenters at Silicon Alley Insider (who appear to be Yahoo insiders) Qi Lu — who was executive VP in charge of search and ad technology — is either a genius (with 20 patents to his name, according to Kara Swisher) and the guy whose talents helped get Yahoo’s fancy new Panama engine up and running, or he’s the guy who is most to blame for the lateness of Panama in the first place and the lacklustre performance of it after it finally launched. Or maybe Yahoo doesn’t need any more search geniuses now it has gotten in bed with Google?

As for Garlinghouse, he’s the guy who diagnosed Yahoo’s problems as “spreading the peanut butter too thin” in an infamous memo that got widely leaked in 2006. Was that just a play for power within the Yahoo executive suite, or was Brad really sincere about the company’s need to change? Whatever his motivation, it appears that Yahoo will be changing without him, according to TechCrunch and PaidContent (Kara says he hasn’t quite decided yet). Given that he’s in charge of Yahoo Mail, Messenger, Groups and Flickr, his departure would leave a pretty large hole. Does Yahoo have the bench strength to fill it?

One commenter at Silicon Alley Insider makes an interesting point: everyone says that Yahoo is too bloated with executives and top-heavy and management-centric and so on, but then when the company shoves some people out the door (or fails to respond when they decide to leave) everyone says the rats are fleeing the sinking ship. The big question is: do Sue Decker and Jerry Yang have a vision for whatever’s left once all the departures are done with?

A couple of other things that struck me: 1) Are people really going to switch that easily from cathy1034@yahoo.com or whatever (or cathy1034@hotmail.com) to a new Ymail or Rocketmail address? Every time I’ve switched from one email to another it’s been a gigantic pain in the ass, and I have vowed to never do it again — there are all those people you have to spam with your new mail. It’s a nightmare. That’s why I got a Gmail address in the first place, so that when I changed Internet providers I could just redirect my mail to that address. I personally know of several people who pay two ISPs, simply because they don’t want to give up their old email address.

And those are the old folks. Point number 2) Anyone younger than about 30 doesn’t seem interested in having an email address period, let alone caring whether it’s hermanzweibel@rocketmail.com or whatever. My teenaged daughters and their friends never use email anyway — they text message (in which case all you need is a phone number) or they use Facebook messages as a way of communicating. I send them email and they never get it. Do they have email addresses? Yes, and they are a combination of their names, underscores, numbers and nicknames, and so on — and they couldn’t care less. Not exactly a huge market opportunity there either, I wouldn’t say.

In a lot of ways, Yahoo seems to be fighting a war that has already been won — which, given some of the other things that have been going on at the company over the past couple of years, probably isn’t all that surprising. I was trying to think of an analogy for this latest campaign, and it’s a little like the company has decided to announce a new kind of typewriter where the keys don’t stick as much, or a better version of the pay phone, or a new video-tape recorder. In other words, WTF?