Yahoo Losing The Market

An identity crisis, which made Yahoo, reach the Shakespearean proportions by late 2007, when Apple CEO Steve Jobs paid a visit to the company's Sunnyvale (Calif.) headquarters. Yahoo has to decide if it would focus foremost on media or on technology, Jobs told the small group of assembled executives, according to one executive who attended the meeting. Jobs made it clear which side he favored: "We are in Silicon Valley," Jobs said, according to the former exec.

If approved, Microsoft will be the in charge of Yahoo's search technology. With that, Yahoo would shelve a half-decade-long effort to rival Google in the lucrative market for search-related advertising and go further than ever to dismantle a culture of technological innovation, say engineers and former staffers.

True, Yahoo employs most of the engineers who work on products other than search, including e-mail, instant messaging, and mobile applications. But for many developers, search was by far the most competitive. Search is the rocket science stuff. Goss and other Yahoo alumni say that as Yahoo out sources search to Microsoft, a wave of top-tier engineers will likely depart, taking with them the inner geekiness that's fueled with much success over the years.