It is hard for anyone to write a more comprehensive eulogy for AltaVista than Danny Sullivan - so make sure to read that. You can also read about the search engine's history on Wikipedia. Another thing you might want to read is Keynote With Louis Monier - who was a founder of AltaVista.
It is not like we didn't expect it, we did, but it is sad to see it happen.
Jeff Dean, a Google Fellow, who had a lot of history with AltaVista shared his thoughts on the announcement on Google+. Here is a snippet of what he had to say:
With all that said, I have a fondness in my heart for AltaVista: it was how I first became interested in building large-scale systems for information retrieval for millions of users.
AltaVista, we shall miss thee, now that Yahoo has kicked out your proverbial electrical cord.