New York Times has an interesting article titled "In the Race With Google, It's Consistency vs. Wow" that talks about how different Google and Yahoo have evolved. Yahoo creates new products that integrate with the existing ones, doesn't innovate too much to keep its conservative userbase and it's more down-to-earth. Google launches many exciting products, likes to come up with disruptive ideas and it adjusts gradually to people's needs. Remember that Gmail needed almost two years for a delete button.
"Our philosophy is that being part of the Yahoo network is a huge advantage and a huge competitive differentiator," said Ash Patel, Yahoo's chief product officer. "When we build a product that takes advantage of the Yahoo network, it doesn't feel like an orphan."
"There is a tradeoff between integration and speed," Google's Alan Eustace said. "We are living and dying by being an innovative, fast-moving company."
Toni Schneider, a former product development executive at Yahoo:
"Yahoo has lost its appetite for experimentation. They used to be a lot more like Google, where someone would come up with a cool idea and run with it. While Yahoo's processes have become too bureaucratic, it is still attracting an audience. Google's products may be more innovative, but at the end of the day, Yahoo is pretty good at nailing what the user really wants."
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