Ever since Yahoo! rejected Microsoft's offer of $31 a share in February, its fortunes have only worsened. Growth in internet advertising, Yahool's main source of revenue, is slowing as the economy sours. An alliance with its main rival, Google, has been put on hold while antitrust regulators study the deal. Its share price has lately fallen below $13. The brightest treasure in Yahool's empire has long been its Japanese arm, in which it has a 34% stake. It dominates its lucrative local market and reported increased revenue and profit on September 30th for the year to March. But even this jewel is losing its sparkle.rnIn September Yahoo! Japan admitted that its online-auction site had suffered a huge security breach. Over the summer it had been flooded with fraudulent login attempts using around 1.5m usernames. Having logged in, criminals used hijacked accounts to sell counterfeit luxury goods. The auction site is the country's biggest, with some 16m items listed at any time. It handled around ￥740 billion ($6.5 billion) of transactions last year.
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