I was at a dinner recently with some friends that included an entrepreneur whose business had been acquired by Yahoo, and one whose business had been acquired by Google. There was a lot of interesting conversation about their post-acquisition life, but one thing really stood out for me and highlighted the two different cultures:
Yahoo runs Microsoft Exchange servers internally for their corporate email and shared calendaring systems while Google uses GMail and GCalc internally for every employee in every office around the world. To me, that indicates that Yahoo says to itself: if there is a better solution out there than our own, then we'll use it. Whereas Google says to itself: we're going to eat our own dog food and even if its not the best now we're going to keep banging away on it until it is the best. Failure to be the best is not an option.
Its hubris on Google's part, for sure, but its that hubris that keeps them innovating. Can you imagine if you're on the GMail/GCalc team and every single day the entire company is dealing with the shortcomings of your system. You think you're motivated to make it the best system in the world? Damn right, you are.