Wall Street wants Yahoo to do more than just kick Terry Semel upstairs to be chairman.

There seems, however, little pixy dust in the notion of Rupert Murdoch throwing MySpace into Yahoo in exchange for 25% of the combined operation.

Murdoch paid $580 million for MySpace in 2005; the Yahoo math values it at upwards of $10 billion.

CNBC was first to pick up this rumor and by Wednesday Murdoch's own paper, The Times of London, was saying - based on unnamed sources - that the talks were "preliminary" and pre-date Semel's departure. It also said the discussions could disintegrate in Semel's absence.

The MySpace-Google connection could easily kill it. MySpace outsourced long-term ad management to Google last year.

Anyway, for the moment, it looks like more competition between Rupert and Yahoo, which Wednesday - in a deal left over from the Semel administration - said it's buying Rivals.com, a college sports site that competes with News Corp's Scout.com that News Corp bought two years ago for $60 million. It's theorized Yahoo paid around $100 million but Rivals reportedly has more traffic.

Not exactly the transforming transaction wanted for Yahoo like wrestle Facebook into a deal or combine with Microsoft, something clever to juice it.

In the cold light of day Tuesday Yahoo's shares lost all they gained and more on the news that Semel was stepping down as CEO. Apparently everything still looked too much the same.

That and the admission that Q2 sales of display ads haven't been shaping up and so results may come in on the low side of the company's $1.2 billion-$1.3 billion forecast. And that's after a lousy stock-suppressing Q1.

Semel may be out but he's still hovering in the background like the new management's godfather, provoking Goldman Sachs to think that Yahoo won't get sold any time soon.

"Our rationale," it said, "is that this management team is very close to Terry Semel and, as such, if a deal was going to happen in the near-term, they would likely have weathered the financial shortfalls until it was announced."

And there's no indication from the new, inexperienced CEO, Yahoo co-founder Jerry Yang, what the devil the company is going to do to beat back Google - or at least stop being outsmarted by it.

He told the New York Times, "We have a very clear strategy in place and we are executing on it."

The stock market, they say, deplores uncertainty and that's what it's got in spades with Yahoo beginning with uncertainty over Yang and confusion over the division of labor with newly minted president Susan Decker, also reputedly Yahoo's potential CEO-in-waiting. She, by the way, sits on the boards of Berkshire Hathaway, Costco and Intel.

Although Yang says he is, he doesn't look like a permanent CEO to anybody, which has opened up the floodgates of speculation about whatever Yahoo's strategy and destiny could be. The Wall Street Journal, quoting insiders, says the board is looking for somebody else to be CEO.

Yang, who shares some responsibility with Semel for Yahoo's drifting, is already filling the shoes of Farzad Nazem, the CTO who resigned last month, a job Yang seems better suited for. He's expected to bring the company more of a technology-focus, which it could use. But it needs more than that.

Global Equities Research thinks Yahoo will be reduced to selling off pieces like its photo-sharing service Flickr and its e-mail. "They already missed the boat and, in the Internet space, there are no second chances," it said.

Jefferies & Co. thinks the new management has six-12 months to turn things around before the board starts entertaining merger or acquisition proposals.

Since Semel's resignation was voluntary, he will not get a severance package. His inflated compensation explains part of the stockholders' unrest aside from the 30% drop in its stock price in the last year and a half. He's taken nearly $450 million out of the joint.

• Yahoo! Dumps CEO Terry Semel