When Google launched adsense, did they patent it to make sure it can't be copied? Can any part of Adsense be patented? if so, which parts? I can see that there are now tons of others like Yahoo adsense etc.. who obviously copied Google but did Google allow them to do that, sell them the rights etc? I'm sure there must be some aspects of Adsense which can be patentable but the fact that it is just advertisement, makes it hard to patent.
Absolutely, Google as patented the ad targeting part of the AdSense system. You can read it online at the US Patent & Trademark Office site. Or you can read my analysis of it.
Well, competition forces AdSense to keep improving. I believe if there is no Ads by Yahoo!, AdSense won't pay so much effort in improving AdSense.
Yahoo was actually first in the PPC Market so they aren't copying. It was created by Bill Gross and team as GoTo.com, which then became Overture, which then became Yahoo Search Marketing. Adwords started as just a PPC market for Google.com and search partners. They later added Adsense so webmasters could earn as affiliates. The targetting algorithm is what primarily makes adwords different from Yahoo. (Yahoo uses a bid per keyword system. Google uses a mess.)
Two reasons... the patent hasn't been granted yet, that's just Google's patent application... and second, Yahoo! and others are free to use other methods for serving relevant ads. I'm not sure what YPN does specifically.