Yahoo wants to be your social network hub

By Michael Liedtke

updated 12:33 p.m. ET April 25, 2008

SAN FRANCISCO - Yahoo Inc. plans to make its Web site a social hub by hosting applications from other online services, part of the Internet pioneer's effort to spawn more advertising opportunities.

"We are going to rewire the entire experience at Yahoo to make it social in every dimension," Ari Balogh, Yahoo's chief technology officer, said Thursday at a "Web 2.0" conference that drew a crowd of more than 1,000.

The more open platform copies a concept that already has been embraced by Internet search leader Google Inc. and a variety of online social hangouts, including Facebook Inc. and News Corp.'s MySpace.com.

Yahoo's new look will give its roughly 500 million users greater flexibility to customize Web pages. They will be able to pick from a variety of mini-applications, known as "widgets," and plant them just about anywhere on the site, including their personal version of the front page.

Hoping to capitalize on the social networking craze, Yahoo also is making it easier to connect with friends and family through its Web site. For example, it will highlight messages from e-mail users' most frequent connections let them track the activities and opinions of online buddies.

The makeover's timing hasn't been determined, but it will happen before the end of the year, Balogh said. It could still be derailed if Yahoo is taken over by Microsoft Corp., which has offered to buy its rival for more than $44 billion in cash and stock.

Maintaining that Microsoft's bid is insufficient, Yahoo has been implementing a long-promised turnaround strategy designed to boost revenue growth after more than two years of financial lethargy. Management has promised the Sunnyvale-based company's revenue will climb more than 20 percent in 2009 and 2010.

Yahoo also announced on Thursday a three-year advertising and content-sharing partnership with CNet Networks Inc., an online entertainment and technology news service.

Like Yahoo, CNet is trying to snap out of a prolonged funk and fend off an unwelcome advance. A group of dissident shareholders led by New York investment fund Jana Partners LLC wants to overthrow CNet's current board because of the company's struggles.

Empowering friends and family to track each other has raised privacy concerns at Facebook, but Balogh said Yahoo will take steps to ensure users retain control over their personal information.

This isn't Yahoo's first attempt to become a bigger player in the Internet's social scene. The company launched a social network called "360" in 2005, but recently closed the service down because it never caught on. Yahoo also offered to buy Facebook for $1 billion in 2006 only to be rebuffed.

Privately held Facebook last year sold a 1.6 percent stake to Microsoft for $240 million.

Now Microsoft wants to buy Yahoo in an effort to chip away at Google's huge lead in Internet search and advertising. If Yahoo's board doesn't agree to a sale by Saturday, Microsoft has threatened to try to replace the 10 directors in an attempt to complete the deal.

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