[danielki]

They're buying pageviews/traffic for their content. According to Alexa[0], Yahoo is still the 5th-largest site globally and in the US. That's a pretty large amount of traffic. Assuming Wikipedia (at #7) gets ~765M monthly views [1], and Yahoo gets more than that, that's close to a billion monthly page views. Even if they do nothing other than switch out the Yahoo "relevant stories" algorithm to one that features more of their own, they can still extract a decent amount of value from that.

To your other point - as a consumer, I've personally never really enjoyed any Yahoo offering other than Flickr and fantasy sports. However, as a developer, I saw them do a whole lot of great stuff that they never followed through on. YUI [2] was the first UI framework I used, and was great for rapidly prototyping/developing a good-looking UI half a decade before Bootstrap was a thing. Yahoo Pipes [3] was a rather interesting experiment that sadly never really took off. YQL [4] evolved out of that, and is a pretty neat way to API-ify page scraping. I've used it in a couple small projects.

[0] http://www.alexa.com/siteinfo/yahoo.com

[1] http://stats.wikimedia.org/EN/TablesPageViewsMonthlyCombined...

[2] http://yuilibrary.com/

[3] https://en.wikipedia.org/wiki/Yahoo!_Pipes

[4] https://developer.yahoo.com/yql/