I wrote about this news yesterday at the SEW Blog. But why is it important for SEOs to know about this specific API? Well, Yahoo! is doing a ton of marketing for Yahoo! Answers. That product has grown very quickly. The content is very rich. The content is formed in a question and answer format. The content is perfect for those long tail queries.
If you use the API properly, you too can pull that content, repurpose it around your niches. You can:
(1) Build more content for you niche (2) Provide more information for your users (3) Help your users more (4) Rank for more keywords (5) Give users more of a reason to stay on your site (6) Give site owners more of a reason to link to you
APIs have given many SEOs the edge to ranking well for their desired keyword terms. If used properly and with some creativity, you can do wonders with APIs, specifically this one.
The API is available at http://developer.yahoo.com/answers/
Good luck!
Forum discussion at WebmasterWorld.