Venture Capitalist Michael Moritz (who was an early investor in both Yahoo and Google), once said, “Google was built on a foundation of Larry's and Sergey's intellectual pursuits. Yahoo was built on the foundations of Jerry's and David's interests.”
This is a nice way to describe the differences between Yahoo and Google. The real difference is that Yahoo is about marketing. Google is about technology.
Yahoo says: “If we put ‘X’ advertisement on ‘Y’ page, which will be viewed by ‘Z’ audience, we’ll have XYZ profit in Q1.” This is straightforward and common.
Google says, “If we build such and such amazing product, and the dogs eat the dog food, we’ll learn X squared about our audience, and, when we eventually place an advertisement, it’ll be seen by the right people at the right time, and we’ll make 10x as much money as another company placing the same ad.” This is not straightforward, but it’s pretty exciting.
PS – Another way to think of Google is the way Geoffrey Moore talks about it. Google has a tremendous media property ("Search") and a tremendous monetizing engine ("Adsense") and this creates tremendous profits that fund Google's many, many experiments, which makes Google's stock price essentially an option on all the businesses that MAY eventually pay off.