In trying to keep his baby out of the clutch of Microsoft, Yahoo CEO Jerry Yang has made a huge bet: that technological superiority is no longer the most important requirement for success. This is heresy in the world of Silicon Valley, where vast amounts of money are gambled on incremental advances in software, chips and Internet business concepts.

Doubters will point out that Yahoo was already behind in its core business, search technology. Having spent the last decade trying to become a new media conglomerate, Yahoo lost its focus on search, the function that created the company. It was no match for the bevy of top engineering talent that Google threw into serving up the right ad for each customer search. The result, according to analysts, is that Google makes significantly more money from each “hit” than Yahoo or any other competitor. Last week’s deal allowing Google to place ads on Yahoo web sites simply acknowledged Google’s superiority.

But what are the long term effects of such a concession? For the engineers who want to be on the bleeding edge of technological advance, Yahoo will be a far less attractive place to work. But then, it had long ago stopped being the kind of place the best engineering talent was drawn to. That was Google, with its combination of cutting edge tech and cutting edge cool.  

Until Mr. Yang retook the reins after last year’s departure of Terry Semel, Yahoo seemed to want to be anything but a tech company. It built a first-rate site for financial information. Long before Google, there was Yahoo mail and instant messaging. There was a news team and talk of original web-only video programming. Yahoo offered shopping, auto news, horoscopes, and music. It was a throwback to the 1999 ideal of the Web “portal.”

But then Google began to add features as well, encroaching on Microsoft’s turf with online applications, from mail to word processing to spreadsheets and calendars. Google also began to build the ultimate Internet infrastructure, massive farms of servers that would guarantee the system would never be down and always be fast. But somehow, all those  Google add-ons built on its search roots. Yahoo’s seemed just, well, add-ons and the results showed.

In April, according to comScore, which tracks Internet traffic, 61.1 percent of all Web searches went through Google; Yahoo had 20.4 percent and Microsoft 9.1.   And in the same month, the service reported, Google took the top spot for number of visitors for the first time, with 141 million visitors. The company it displaced? Yahoo with 140.6 million uniques. Microsoft was third with 121.2 million.

The possible combination of Yahoo and Microsoft’s Web traffic was just one reason investors salivated at the idea of an acquisition.  While Microsoft seemed increasingly irrelevant in the evolving world of “cloud” computing, there was a hope that its technical clout and financial resources could bolster Yahoo and create a company that was better equipped to fight off Google.

Instead, Mr. Yang decided to sleep with the enemy. An additional billion dollars in ad revenue may offer a short-term salve to Yahoo investors, but many experts think the company’s long-term future is in serious jeopardy. If Mr. Yang is right, that a technological edge is no longer important, than he will have proven the pundits and doomsayers wrong.