It's a shame they didn't, because many of us users sure did/do. By virtue of its popularity and simplicity, you could know almost every page with any merit was in its system and tagged, making it easy to discover stuff you hadn't even bookmarked yet.
Example: Want a good Python tutorial about threads? http://www.delicious.com/tag/python+threads+tutorial - You can pretty much pull things out of your ass and constantly find gold on there. Yahoo has no spine.
Yahoo has no vision, and now they are too busy chasing their own tails with respect to all the bad press they are getting surrounding their layoffs, lack of technology and utter failure in trending technology.
I understand turn arounds take time but such decisions are going to lead to nowhere.
Sure, they have and had technology - yet their utter failure in vision and management has resulted in them losing an understanding / ability to use their tech.
Besides, using delicious data would be far too open to SEO abuse.
Late to the party as usual...
Edit: Wow. Someone has to take this private. This is one hell of a valuable database. Yahoo must be staffed by gorillas if they're throwing away this kind of data.
Why don't they spin it off into a startup? Just open-sourcing the code would be useless and even the data wouldn't hold its value for very long without the application and community continuing. But a startup would have a fighting chance to do something great with it.
I did hear a second-hand story about Yahoo web search, for what it's worth. When the Delicious acquisition happened, of course they were super excited for this very reason -- that Delicious should constitute a high-quality dataset (that Google didn't have!) Then they tried all sorts of things to incorporate it into their relevance ranking algorithm, but never could get it to work. I personally think Yahoo search had good relevance algorithm people, and therefore, if you believe this story, that Delicious data is not useful for web search relevance.
So I understand this story might be hard for others to verify. But I think it's reasonable to assume that if the data really was valuable, they would have used it for web search, and someone would have bragged about it at some point -- especially given the large amount of interest from the wider developer and computer science community about how potentially useful the Delicious dataset should be.
having been part of one particular exit I know all too well that startup founders and ex-employees have deep emotional connection to their former company, no matter how much they got for it.
Depends on who you are. To the investors, that would be a failure. To the people that find it useful, it wouldn't be a failure until it disappeared or otherwise ceased to be of use.
He can't offer them a price that is lower than that.
It wouldn't take that much more effort to build the whole thing all over again, anyway.
The outcome is not entirely surprising.