> And before google, yahoo had outsourced to 'Inktomi' and before that IIRC to 'Altavista'

> Yahoo wasn't even trying to compete in search.

Yeah. This is a common MBA-ism: focus on the top of the value chain where the largest margin exists.

The theory itself is actually not wrong, TBH; it's just that Yahoo misidentified where the top of the value chain lay. They thought the top of the value chain was the users, and that sponsered content was the product. Google correctly identified the users as the product and the advertisers as the top of the value chain.

IOW, Yahoo sold curated content (product) to users (customers). Google sold users (product) to the advertisers (customers). To Yahoo, the people visiting their site was the top of the value chain if you're directly pitching products to those users!