re:tone, yes, I'm taking a sensationalist stance because I feel the author takes one too. I'm aware this is detrimental to discussion, but hey, it's more fun this way! :)
re:interpretation of death, sure, let's call it irrelevance. OR let's even call it 'random variable x". The point is that pg asserts the company has been in "x" for 12 years. Which is 60% of the WWW's lifetime. It may be a decline, but I would not call it a spiral. at least of death.
re:research, I agree about orthogonality of research and company. This was addressing pg's point about Yahoo being a "talent-magnet" -- they indeed are a talent magnet in this domain.
[edit: this thread has some insightful replies by others that are worth reading.]
I'm sorry, this may be PG's backyard, but I've gotta call bullshit. Note: I am not a Yahoo employee or corporate shill.
1. "At Yahoo this death spiral started early."
Apparently this death spiral took TWELVE YEARS (the WWW is 20 years old), and Yahoo is still #1 (or #2) in terms of total properties on the web. How is this a death spiral?
2. "If there was ever a time when Yahoo was a Google-style talent magnet, it was over by the time I got there in 1998."
Are you kidding me? You're implying all the current Yahoo engineers are idiots? Then how come each piece of code they release is revered, lauded and used by everybody?
Speaking of talent: Yahoo got best paper at EVERY data-related conference in 2010. No single lab(Google,MS) or university(Stanford etc) has ever done this. Clearly you can achieve this without talent, pg!
3. "In the software business, you can't afford not to have a hacker-centric culture. Probably the most impressive commitment I've heard to having a hacker-centric culture came from Mark Zuckerberg, when he spoke at Startup School in 2007."
Which company is responsible for inventing the term "Hack Day": Yahoo. Which is the only company to _promote_ hacking culture to students? Yahoo. Yahoo != Hacker-friendly? WTFFF!!! (edit:goog does soc, but it doesnt have engineers travel around the world teaching kids hands-on like yahoo does)
4. Google and Apple are shiny and get all the attention. Yahoo's the internet's underbelly. It's audience may not be SF hipsters, but they exist and there are a lot of them. Just because they're not like you doesn't mean they dont exist. Just because Yahoo doesnt cater to you doesn't mean it doesn't exist.
5. pg's product got hosed after inclusion into Yahoo. This happens. Reading a Yahoo critique from pg is like reading a Google critique from Evan Williams (Blogger), or a Google critique from the Dodgeball guys. It's a biased opinion.
6. It's a miracle Yahoo has survived for so long despite being criticized by the media /market for more than half its lifetime. The only other company that has had it worse was Apple, when they fired Steve Jobs. Yahoo doesnt have a Steve Jobs, and has been managed badly, but the engineering is SO GOOD that it STILL does a good job overall.
I'm sorry that Yahoo hasn't invested enough in evangelists to stop people like you from spreading FUD like this.
* Yahoo established a relationship with Microsoft. The relationship involves refactoring both Bing and Yahoo Search to use the same web index.
* The crawler, storage and serving infrastructure for web indexes are capital intensive. It has nothing to do with technology -- it amounts to buying up farmlands in Idaho to store millions of computers.
* Hence, it's simply about whoever has the largest pile of cash. Since Yahoo's pile of cash is tiny compared to Google, the ONLY way to stop Google from a monopoly is Microsoft.
* This lets Yahoo concentrate on improving search outside of the boring parts of search. They're calling this the "death of the 10 blue links". If you see yahoo search today, they're ahead of Google on this.
* Outsourcing capital-intensive parts allows Yahoo to innovate on things that they are VERY good at: content optimization, display advertising, and editorial content.
* Thanks to this deal, Yahoo also now owns 100% of the display advertising market outside of doubleclick. This includes all Microsoft properties. What's important to note is that Facebook has a display deal with Microsoft till 2011.
I hope that makes it clearer. Yahoo is not MS's bitch. MS is not Yahoo's bitch. This is a strategic partnership. This happens in business.