I was going to write a longish post about del.icio.us and Yahoo, but Pete Caputa said most of what I wanted to say in his post, Lessons from the Del.icio.us Acquisition, so you should probably just go over to Pete's blog and read what he wrote.

A few quick bullet points to sum up my thoughts:

• Tagging represents a path towards a better search experience. The process of tagging provides better keyword metadata by which to build a keyword-based search engine. The technology for del.icio.us was simple, but the users + data held disproportionate value.
• Yahoo failed to bury del.icio.us with MyWeb 2.0. There was/is significant value in the user community that del.icio.us built; it will be interesting to see how Yahoo handles the transition, and if the community remains intact. The other side of this coin is that the act of social bookmarking remains a fairly technical/geeky activity. I'm not sure how well (or at all) something like this will translate to the masses. I can't see my grandmother, or my mother for that matter, ever using a system such as del.icio.us or MyWeb 2.0 as they currently stand. Not when you can just go to Google and type in your "tags" (i.e. keywords) and get back what you're looking for 9 times out of 10.
• In the same vein, this should be a message to investors that there is life after GYM goes after your space *cough cough*. Innovation typically takes place outside the GYM, and couterculture is attractive to users.

Congratulations to the Joshua and the del.icio.us team.