Yahoo didn’t lose because Google out-competed them on search. They lost because they didn’t really care about search – indeed, they outsourced algorithmic search to Alta Vista, Inktomi and then Google itself. The leading portals back in circa 2000 (Yahoo, Excite, Lycos etc) desperately wanted to keep keep users on their site – the buzzword was “stickiness” – but Google knew better and focused on getting users off of Google to other places on the web. Yahoo became just another place to read celebrity gossip and use generic web services.
Chris Dixon