yahoo is migrating its application logic from C++ to PHP. Radwin has an interesting slide deck online which explores the logic and the evaluation criteria that Yahoo used to choose PHP (via algorhythm).

I don't see this as part of a broader trend of larger enterprises adopting open source. Open source does have a great deal more credibility than it did a few years back. But Yahoo has always been an early adopter of open source and in that it is different from other Bay area technology companies.

Large scale adoption of open source in large companies, specially non-IT fortune 500s, is probably a long way away. This is partly because of the conservative nature of large businesses, partly becuase of the ingrained belief of their advisers that 'commercial software is better supported and is more stable' (as an entity). Those mainframes are not going to go away easily.

But I do see this as part of a broader trend by larger companies to cut cost by whatever means possible. As recession continues and the IT budgets stay frozen across the country, layoffs have reached saturation points in most places. Companies are now showing innovation and smart thinking in their IT planning. Many are sending a great deal of work offshore. There was an excellent article in McKinsey Quarterly sometime back on offshore development which I wish I could link to here. Unfortunately, they have now made the online version priced.