Many people think that Yahoo! is as good as dead: investors have driven the stock down almost 20% since its recent deal with Microsoft. But I think the company is now in a stronger position to stake out new ground, rather than fight with Google over stale turf. Leave that to Microsoft.
Now that Yahoo! has freed itself from its fight with Google, it can return to its roots as a directory company that helped users to make sense of the world around them. Indeed, back in 1994, Yahoo! started with a team of editors who combed through the small amount of information that was then online and generated lists of the best content, complete with links. Google showed up with an automated tool to search for content - any content - and Yahoo! used that service before developing its own search capability.
But the world has changed. The problem now is not finding information; it's filtering it and structuring it. TMI - too much information - has become a recognized acronym.
You can't rely on human editors to structure information anymore; you need automated tools, augmented by human expertise and specific domain knowledge. But search alone doesn't work, either: search is like a flashlight in a dark room; it pinpoints one or two things but leaves the surrounding space murky. What people really want is a lighted room, with things displayed neatly on labeled shelves.
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