Yahoo! Sharpens Its Tech Edge

You've Got a Friendster

And this is where the innovations come into play. Late last month, Yahoo! took the wraps off Yahoo360, a page like Friendster's that creates an online identity for users, complete with their photos, restaurant reviews and personal histories. Users can weave together their 360 page with a blog, an online record of personal narration that is spreading like wildfire on the Internet.

"A new Internet ecosystem is emerging around blogs and other forms of next-gen content," writes Marianne Wolk, an analyst at Susquehanna Financial Group. "The potential strategic gain from the blogosphere is substantial, as it could change the way we use the Web. User interest is exploding, and Yahoo! will need to lead in this area if it is to sustain its leadership," says Wolk, whose company has no underwriting relationship with Yahoo!.

Blogs and social network technology have proven tough to monetize -- Friendster signed up millions of users but couldn't keep them aboard. But the payoff is potentially enormous: Imagine getting tens of millions of people to create content for your portal without paying them a cent but while posting ads alongside their content.

In RSS, a new twist on an old form of content distribution called "push," Yahoo! has another gimmick to keep people on its site. A decade ago, push aspired to aggregate individually tailored content to a PC, but it failed to catch on because of broadband constraints. RSS achieves that goal with much less fuss, letting people have links to the news sites and blogs of their choice on a single Web page. If Yahoo! has its way, that single Web page will be on its portal.

To pull all of this off, Yahoo! needs to win "street cred" among the technophiles who are pioneering the blog and social network realms. And here, too, Yahoo! has made small but key moves -- it's bought Flickr, one of the hottest social-network sites around, and unveiled a search engine that focuses on work licensed under Creative Commons, a system that gives artists, developers and others more flexible control over copyrights.