Well, that's a bit of an exaggeration. When I left Yahoo Europe in 2005, there was still Perl all over the place both in Europe and the US at least. I managed the Yahoo Europe billing system, and that was mostly Perl on the backend, for example.
[small world, btw., courtesy of some minor profile-stalking: I interviewed with Ed about a position a few years back; your service looks interesting - I have a client that might be interested]
What Rasmus' hire did was push Yahoo to allow server-side scripting languages on the web server. And that's where PHP was the blindingly obvious choice. (though, I would not be surprised if there was a bun-fight with mod_perl...)
The funny thing was that on the instances I heard Rasmus talk, he complained we were taking it too far - he wanted simple PHP templates, not the kind of large PHP applications the US billing team and others were doing. He sounded quite exasperated about it last time I was at one of his talks.