I think yahoo is already broken. They have three things of value: brand, eyeballs, and engineers.
Yahoo has broke almost everything it has aquired. Broadcast.com, launch, overture, inktomi (I think that’s misspelled, but it was a search engine that had a few properties, namely altavista)
You can argue that yahoo has not broke flickr or delicious, but then the question would be what has yahoo done with those brands? The short answer is nothing, the long answer involves stopping innovation, spending money, destroying their own services that yahoo had already spent tons on.
I wish they would merge, do something like push google harder, innovate. Microsoft needs to do something andperhaps a culture change like yahoo would be the answer.