Look at Google. They become top dog in their subject matter and then they start trying to compete in everything else. mobile OS, robotics, deep learning.
Look at MySpace and compare them to Facebook, who has gone out of their way to purchase up-and-coming Social networks, WhatsApp, Oculus.
My guess is that their problem isn't that they don't have something to offer it's that they didn't have the NEXT thing to offer. They have constantly been a step behind in their acquisitions instead of a step ahead.
Yahoo! News still dominates Google News, Yahoo! Finance still dominates Google Finance. Yahoo! Answers is pretty much unrivaled in Q&A category (I know, I know, the quality is not there, but all we care is traffic figures)
For many of the Google searches a site on *.yahoo.com network is still a top result.
Those things are all being replaced by newer forms of news sites, QA sites, finance sites, etc.
I couldn't even tell you what Yahoo offers because they don't seem to offer anything. Sure they have news, email, weather, etc. But so does Google and everyone else.
Yahoo should have taken Microsoft's buyout offer. Microsoft needed a landing page ever since they lost MSN. I guess now they have Bing instead.