Yahoo to Tighten Facebook Integration

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Yahoo and social networking giant Facebook have announced they’re deepening the integration of their services, with Facebook features getting promoted right to Yahoo’s front page. Yahoo’s Facebook Connect offering will enable Facebook users to tap into their streams—real-time updates from a users’ friends and contacts—and update their status right from the Yahoo home page. Yahoo will also be expanding Facebook capabilities in other Yahoo properties, like Yahoo Mail, Yahoo News, Yahoo Finance, and Yahoo Sports.

“With this integration, we are opening the door for two of the Internet’s largest online communities to make it easier for people to stay connected,” said Yahoo Communities VP Jim Stoneham, in a statement. “It also enables us to further the Yahoo Open Strategy, which is aimed at making experiences dramatically more open, social, and personally relevant for the more than 500 million people that visit Yahoo each month.”

Users looking for these new features will have to wait a bit, however: the new features are expected to begin popping up only during the first half of 2010. Financial terms of the deal were not disclosed.

The benefits of the dea to Facebook are reasonably clear: it gets deep integration in some of Yahoo’s top-drawing services; for Yahoo, the benefits are slightly more indirect: when users shore content from Yahoo sites and services with their Facebook buddies, they “create a loop” that leads back to Yahoo services. That in turn means more eyeballs on Yahoo, and that means more ad sales.

It’s not clear whether Yahoo’s recent long-term tie-up with Microsoft had any influence on deepening Facebook integration: Microsoft bought a 1.6 percent stake in Facebook for some $240 million back in 2007, which has seen Facebook integrate Microsoft services such as Microsoft Live Search directly into its platform.

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