In 2002, Yahoo! began a serious effort to compete with Google in search by buying Inktomi (plus Altavista and FAST). In what must have been early 2004, I came

In 2002, Yahoo! began a serious effort to compete with Google in search by buying Inktomi (plus Altavista and FAST). In what must have been early 2004, I came over with the rest of the Inktomi crew to work on search. The Inktomi people were top notch, Yahoo! seemed earnest about doing what it took to go head to head with Google, and the integration efforts were done really well. While I was there I worked in an island of Inktomi people (plus some from Altavista), and I repeatedly got the impression that Y! people, technical and otherwise, were a little soft, maybe even complacent, relatively speaking. I do feel Y! did a great job -- and made a great decision -- in integrating its search acquisitions; but those acquisitions threw into sharp relief what Y! really was. It's hard to get into too much trouble when all you're doing is throwing horoscopes onto web pages; but Yahoo! never struck me as being serious about software, and as Paul says, they didn't seem to think that was a problem. Somewhere in 2005-2006, Y! made an attempt to revamp its search ad services with a large-scale software project called Panama. It was going to do a lot of things, including ad ranking refinements to improve revenue per query, and allowing advertisers to create more complex ad campaigns. This project seemed to undergo huge troubles, and I wonder if it was ever completed in any real sense, because I heard so little about it, and everything I heard suggested disaster. Honestly I don't know if the fruits of Panama -- such as improved auctions for ads on search result pages, which is a critical thing -- were ever deployed. But a couple years later they made the Microsoft deal. Over the last couple years, select people at Y! have moved on to Google, and many many others are now at Microsoft.