All of their funding comes from search deals, which are driven by the high value of search advertising vs display advertising. The tiles are display advertising and probably added up to roughly nothing. I predicted (at launch) they'd kill it as soon as they realized it was irrelevant to their bottom line, and annoyed people.

Edit: added info about search/display ad split

I wonder what would happen to Darren Herman in the long run. My understanding is he was hired to help driving the ad business side of Tile.

No, they just mean they will no longer engage with the Tiles. Their contract with Yahoo is not impacted and has nothing to do with Tiles.