I think this is a very good idea (not a novelty, though, because Microsoft, Google, Philips and some other companies already have similar projects), specially if such incubator manages to isolate the innovative projects from the parent organization.
Often companies fail to develop innovations because they manage those inside the mainstream organization. This means that the project will share people, resources and values with the parent organization, creating some serious drawbacks.
When companies, on the other hand, use an isolated spin-off the innovation will have much better chances of success. The new venture will not get infected with “traditional management” mindsets and will be forced to find its own resources and its own customers.
We should be able to see some results from Yahoo’s project soon.