Why is Yahoo buying back $3 billion of stock?

According to an SEC filing, Yahoo’s board of directors has approved a stock buyback program that will pay cash for up to three billion dollars’ worth of shares over the next three years. The repurchases may take place on the open market, or in privately negotiated transactions.

It’s generally assumed that a stock buyback means Yahoo’s directors have no compelling ideas for what to do with the money. They don’t think they can invest it in a way that will grow the company. Given the company’s fierce competition with Google and AOL, co-opetition with Microsoft, and no real fight against Facebook, it’s not a good sign. Carol Bartz and her turnaround team don’t have a bold new plan to spend some money to win back some market.