Actually, it might not be a great model for Google, because it is inadvertently getting Google's targeted converting quality visitors to Yahoo advertisers. Yahoo gains all the way. More converting customers means more business for Yahoo. As a result Yahoo gains not only from its own search and content advertisements, but also taps into Google's vast target audience.
If Google does not follow suit via a Yahoo ads --> Google adwords campaigns, it is surely going to throw open huge imbalances.
It would be interesting to see how things start taking shape. Already, it is more expensive to advertise with Yahoo, while Google turns out to be the common man's advertising medium with 5 cent CPC budgets. With more converting customers for Yahoo via arbitrage from adwords, Yahoo will see its profits skyrocket.
In my opinion, Google would be wise to open the floodgates to arbitrage from Yahoo to its adwords customers to maintain an equilibrium.