Problem: People are lazy, Yahoo had way too many links on their homepage. While variety is nice, the first impression casual users get from Yahoo is "ok... where do I start?" For that reasons, so much of Yahoo's contents never get a chance to be viewed. To emphasize, Yahoo has great articles and analysis that are fun and interesting to read, Google doesn't.
Solution: Yahoo should change their homepage into something like Google, but add a second search bar with the label "What do you Yahoo to do today?" As someone types into the textbox, related Yahoo contents appear diretly (like the Vista search).
Bottomline: With a simple twist on the homepage, Yahoo does not really have to change much to become more popular than Google.
Yahoo beefs up on people who actually know how to use PHP like a professional.
It's a basic difference in culture.