There are plenty of gaps in what Google do that Yahoo! do or did better (stocks, sports, news, weather, chat, groups etc). It's a shame they focused on competing against exactly where Google were the strongest.
I am not sure which company the they is in your second sentence. I think you mean Yahoo and they do have some good services. I haven just always used google products (remember iGoogle?) I have set up yahoo finance and it is lovely but it is just a (small) pain to jump to another site/app ect.