What yahoo can do improve their services to compete against Google / Microsoft ?

Yahoo!, A worlds first best internet company, They lost their monopoly in search, when they missed an opportunity to buyout google ( Inc ). They did lot of mistakes & Best things in their history. We are not going to analyze the Mistakes & best of yahoo company.

But where & how Yahoo can beat Google?

Business : Search Engine
How : Google is having 65% of world’s search queries. Where as yahoo & MS having remaining 30%.
What google is doing better than yahoo ?
Simplicity to end users.
Vertical searches ( Later on yahoo introduced ).
Fastest search results ( Having more data centers & highest in numbers )
Google got entered into developing countries, Where as they are getting more queries ( India, Brazil & more ). Yahoo didnt concentrated on these countries before.

can do a vertical search for Country.
can do integrate NLP to find the exact meaning for users query & improve search results
Yahoo can integrate Yahoo Answers into their search result, when some one rising the query!

Business : Email
How : Once upon a time Yahoo was the meaning of Email. Every one had atleast have one account with yahoo. Now time is different. People are switched to Gmail & live.

Yahoo mail is not up to date with their competition. they are not providing anything innovative to try out. Gmail has introduced, integrated with chat, talk, video & tags. Hmm they did lot .. Where are you Yahoo! ?.. still you are doing with web 1.0 ??

Yahoo can introduce features like talk, More interactive user chat, instead of tabs like style ( that is stupid when you are chatting with more than one ). Yahoo can integrate some social features like these, more options for mail filtering. Yahoo mail always fill up with spam mails.

Yahoo can integrate semantic web into their service to provide more interaction to user & make more business.