updated 3/21/2005 6:45:14 PM ET 2005-03-21T23:45:14

Yahoo Inc. is acquiring a Canadian photo-sharing company that lets people share digital images with select groups or the whole world, expanding its portfolio of self-publishing and “social networking” services.

The startup, Flickr Inc., lets people upload digital photos from computers and camera phones, publish photos in their blogs, share digital photo albums with anyone else who uses the service, and alert other users whenever they upload a new photo or album.

Neither Sunnyvale, Calif.-based Yahoo nor Vancouver, B.C.-based Flickr would disclose terms of the acquisition. The companies signed a definitive agreement Friday.

Yahoo, which already has a more traditional online photo service, is one of several Silicon Valley powerhouses seeing promise in the fast-growing niche of Internet-based digital photo management.

On Monday, Hewlett-Packard Co. announced plans to acquire Snapfish, a San Francisco-based startup with 13 million members and a Web site that stores roughly 350 million photos.

Flickr, which currently offers a free beta product on its Web site, reassured members Monday that Yahoo wants to keep Flickr’s management team and preserve the “flavor” of its online community.

“It means that we’ll no longer have to draw straws to see who gets paid,” one Flickr worker wrote Monday in a post to the startup’s official blog. “The best thing is we no longer have to worry about finance, HR, legal, or things at which we are completely incompetent and were taking our time away from building Flickr.”

The company’s slogan is, “This isn’t your grandfather’s photo-sharing site,” and photos are categorized in unique ways. Numerous albums are devoted to confusing street signs. Others focus on Halloween costumes or pets. There’s even a section dedicated to dog muzzles.

The acquisition, first reported by CNET News.com Sunday, is only the latest investment in social networking services by e-commerce powerhouses.

Search engine Google Inc. quietly launched social networking site Orkut earlier this year, and Silicon Valley venture capitalists are lavishing funding on networking sites such as Friendster, Evite and Meetup.

Last week, Yahoo launched a service called “Yahoo 360” that lets users share tips on local restaurants and watering holes, and share personal reviews of movies, books, music albums, hiking trails or anything else.

Social networking sites strive to connect strangers based on common interests or careers.

They generally require users to register and provide personal data such as what they like to do in their spare time, where they live, where they hang out, what they do for a living, where they went to college, or what type of movies or music they enjoy.

The sites then provide links to other people with similar profiles, so like-minded users can get in touch with each other by e-mail or instant message. Unlike other facets of e-commerce, which emphasize virtual communication, social networking sites generally use the Internet to facilitate face-to-face meetings.

Flickr will remain a standalone unit of Yahoo for at least several months, but eventually Yahoo might incorporate its services into existing products.

The site includes more than 5.5 million photos but does not disclose how many people have subscribed to the service.

Flickr’s whimsical categories make it quirkier than traditional online photo sites such as Kodak’s Ofoto.com, which allow members to catalog and share photos. Flickr emphasizes photo sharing more than Google’s free Picasa software, which sorts and edits photos stored on your hard disk.

“It’s definitely a part of what we see as the next generation of Web services,” Yahoo spokeswoman Joanna Stevens said Monday. “We’re very excited about integrating the community and technology that Flickr has into new product ideas.”

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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