"On April 23, 2009, Yahoo! announced that it would be closing GeoCities, and that it will no longer be accepting new registrations, though the existing GeoCities accounts will remain active until 2009's end. Yahoo! encouraged users to upgrade their accounts to the fee-based Yahoo! Web Hosting service. With the closure of GeoCities, Yahoo! no longer offers free webpage hosting. In response to the closure, rival webhosting services began to compete for the web sites leaving GeoCities. For instance, German web host Jimdo started the "Lifeboat for GeoCities" service to encourage GeoCities users to put their websites on Jimdo. Rupert Goodwins, the editor of ZDNet, perceived the closure of GeoCities as an end of an era; he described GeoCities as "the first proof that you could have something really popular and still not make any money on the internet." Vijay Mukhi, an internet and cyber security expert quoted in the Business Standard, criticized Yahoo's handling of GeoCities; Mukhi described GeoCities as "a lost opportunity for Yahoo! They could have made it a Facebook if they wanted." Rich Skrenta, the CEO of Blekko, posted on Twitter an offer to take over GeoCities from Yahoo! in exchange for 50 per cent future revenue share In late June 2009, Yahoo! updated the GeoCities home page to indicate: "GeoCities is closing on October 26, 2009."" Source and further information: http://en.wikipedia.org/wiki/Geocities

Basically because of greed. If they cant make a buck from it why offer it? Especially in this economy any company offering anything free is risking a lot. So its greed pure and simple. They want people to upgrade, but a lot of them are just gonna give the finger to yahoo and go somewhwre else.

Yahoo probably worked itself into a tight spot. It attracted the absolute dregs of the Internet over the years, and that's what they're stuck with. Yahoo!360 made MySpace look pretty for God's sake. Take the stupidity endemic to AnswerBag and multiply it a few times and you have Yahoo!Answers. Yahoo!Chat is just spambots spamming each other and the occasional jackass trolling for online sex. GeoCities could have pioneered blogging, but instead kept going with those hideous self-made pages that its users were (a) too dumb to know how to make look pretty and (b) cumbersome to update anyway. I'm sure the stupids don't provide great ad revenue during recessions either.

Everything is money. Unless Yahoo can make money they will not continue the service.