Yahoo has announced that it has given up the quest to be the dominant search engine on the internet.  Instead of being in a “who can one up the other” contest with Google.  While this may have rankled Steve Rubel a bit it’s not quite as bad as all that and no reason to give up on Yahoo completely.

It’s not as though Yahoo has decided to simply sit out the rest of the game and watch from the sidelines as Google trounces any and all competition (at least for the time being).  Far from it.  It still sounds as like Yahoo will work on improving the accuracy of its paid search listings.  Even better would be for it to continue work on its series of social networking and tagging sites/applications.

There are many factors that differentiate Google from Yahoo and what I use is whichever serves my immediate needs better.  Yahoo is a great aggregator and host of news and information since they actually put wire service and other stories on their website, as opposed to Google that just links to the original story.  That means there’s more of a permanant record on Yahoo than there is on Google in terms of news stories.

Google’s reputation was built primarily on speed of results and their minimalist home page.  They expanded the brand when they realized they could make tons of money by selling ads next to search results.  That was then branched out to ad placement on other sites and letting everyone share in the revenue.  It’s done those and other things very well and they should be applauded for it.

What they’ve failed to do is what Yahoo has done well and I hope Yahoo continues to expand upon.  By letting people customize their My Yahoo page and have one single place where they can go for email, news, IM, shopping, blogging and a host of other online activities Yahoo has made their services a great option for people interested in online community building and for those not wanting 38 different logins.  Their purchase of Flickr and del.icio.us are signs that they really get the power behind mass concentrations of passionate users.

While some see this as a concession of defeat on the part of Yahoo I think it’s an appropriate shifting of priorities.  Every dollar they spent trying to out-Google Google was one dollar they couldn’t spend innovating another way to connect users in meaningful ways.  I say they made exactly the right move.