As far as the ad itself, truth be told, I checked into the "$1.99 for the first year" offer back when I purchased my domains (winmillionsfree.com, freemillionsonline.com, and winfreemillions.com) and I think I settled on a different phrasing of the same option (around $7.something per year for 2 years I think). There was also a "first year free" I think, but all the marketing ploys came out to the same price in the end.
I ran into similar situations when I worked for AFLAC several years ago. Granted, they are an insurance (a treacherous area for marketing) company and are therefore held to stricter standards, advertisement wise, but that's not the only reason. AFLAC also has to monitor its ads closely because they use weakly-trained "independent representatives" to sell most of their policies, but I digress. If you were selling AFLAC and wanted to print your own flier, you had to submit it to the corporate marketing department and the average approval (or denial, in most cases) took anywhere from six months to a year. Good luck getting a solid campaign off the ground if it had anything to do with the timing of an event, unless it was more than a year away and you were an amazing planner!
So back to Yahoo: personally, I can't think of any real reason an internet company would let something like this happen, unless of course, they had just gotten too big for their own good.
Moral of the story, enjoy the fact that you're not a humongous corporation and have the ability to keep your ads updated with fresh releases anytime you want. I hope we're all able to see the beauty in their laughably-ineffective, marketing mishap.