Are content farms on the way out?

This is a bit late, as I meant to blog about it last week, when I first heard about it: Google has changed their algorithm in order to try to get content farms — websites that churn out massive amounts of poorly written content — off the first couple of pages of search engine results.  A high ranking in search results is generally considered to be the jackpot, since most people looking for something online don't search past the first page or two, but content mills often dominate the first page or two.  (I assume it's not this way anymore, but as an example, it used to be that almost no matter what you were searching for, Associated Content had an article on the first or second page of results.)

Google, however, has apparently found a way to try to clear spammy content from the top results to make room for the good sites.  Here are a couple of articles:

Google declares war on lousy websites
Google's working on saving 'good' websites

I wonder a couple of things, though.  First of all, how do they decide what is a "good" content site or a "bad" content site?  For example, let's take Yahoo.  Yahoo has news articles, community pages, email, etc. — seems like a good content site and online community, right?  But not long ago they bought Associated Content, which I would describe as a content farm.  So how does Google decide whether or not Yahoo deserves a high ranking?

What are your thoughts?  Is this going to be harder to implement than Google thinks, and is it going to have any impact on content farms?  Since content farms are a contentious issue for writers, I'm interested in what the rest of you think will happen as a result of Google's new algorithm.