Imagine someone searching for “Internal Yahoo Reorg Memos” (without the quotation marks) at Yahoo.com. You might end up with the following results:
Now imagine that the search engine might look at the links pointing to each of those pages (and maybe a few more of the pages in the results), and look at the anchor text used in links to those pages.
Yahoo could gather that different anchor text, and perform more searches. It might then take results from these new searches, and grab the anchor text from links pointing to the pages in the new search results. And so on. And so on.