Yahoo users will soon have one place where they can manage all the services they use on the popular website.

The company has begun a mammoth re-engineering project that will unify the disparate services Yahoo runs.

It hopes the project will transform the site into a vast social network where Yahoo users can quickly find and communicate with each other.

The project should also aims to make it easier for web developers to use Yahoo data and services for their own ends.

Monkey magic

“We are literally in the process of rewiring Yahoo from the inside out,” said Ari Balogh, chief technology officer at Yahoo in a speech at the Web 2.0 conference in San Francisco.

By re-engineering its internal workings it hopes to tear down the walls between its web sites and services so each user only has to visit one place to view and manage everything they do at Yahoo.

Yahoo has built up its online presence using both home-grown services and by acquisitions. Recently it has bought photo-sharing site Flickr, bookmarking site Del.icio.us and social calendar site Upcoming.

Mr Balogh said the changes would give users more control over how much information they share and make it much more straightforward to set up ad-hoc social networks with friends and family.

“We are not building another social network,” said Mr Balogh. “We are building social into everything we do.”

Charlene Li, vice president and senior analyst at Forrester, said: “My hat goes off to Yahoo that they have been able to execute this in a very difficult and stressful time for them on a strategy that I think is potentially very interesting.”

One of the first results of the unification project is Search Monkey which opens up Yahoo’s search technology to developers and users.

Yahoo is providing information so developers can call on the search engine and users can tune their sites to appear high up in keyword results.

The re-engineering project is part of a larger strategy, dubbed Y!OS (Yahoo Open Strategy) that is due to be unveiled in late 2008.

The announcement came two days before the expiration of a deadline set by Microsoft for Yahoo to agree to a merger. Microsoft has threatened to mount a hostile takeover if Yahoo refuses the offer or does not respond.

Google expanded its image advertising space with yet another support: mobile phones. Until now, Google only offered advertisers the ability to purchase text links for mobile devices through its AdWords. The search giant announced yesterday that it introduced brand-image ads for mobile phones. The images are specially designed to fit on mobile phone screens and are targeted according to the keywords users type into phones to search for information.

Google has specific requirements from its ad customers: they have to link to a mobile-friendly page. The pricing scheme is the usual pay-per-click which made Google so successful. Only one image per page will be displayed to avoid cramming of too many elements on the relatively tiny displays on mobile phones.

Alexandra Kenin, a product marketing manager for Google Mobile Ads, said on a company blog that mobile image ads serve as a branding tool and have shown to have good click-through rates. For now, the service is only available in 13 countries: Australia, China, France, Germany, India, Ireland, Italy, Japan, Netherlands, Russia, Spain, the UK, and the United States, Google said.

A text line can be found under the image which makes it clear that the image is an advertisement.

Google has lagged behind other companies in bringing image ads to mobile phones, but so far Internet usage on the go was relatively low. Yahoo, AdMob and Third Screen, which is now owned by AOL, have already used mobiles as advertising platforms.

For the time being, mobile advertising is not a big business, but Google certainly understands that mobile Internet usage will skyrocket over the next few years.

China managed to surpass the United States as of this year, when its Internet population reached 221 million users, as the Ministry of Industry and Information revealed. The findings show that despite China’s Internet policy, which limits access to certain content, the online population is growing every year.

Last year’s measurements found China 5 million users-short compared to the United States, the China Internet Network Information Center (CNNIC) reported at the time, according to the Xinhua news agency. At the end of 2007, the proportion was 16 percent compared with 19.1 percent of the world average (by comparison, 71 percent of the U.S. population uses Internet).

“Despite a rapidly increasing Internet population, the proportion of Internet users among the total population was still lower than the global average level,” the Ministry said, as quoted by the Xinhua news agency.

China’s Internet population made a remarkable progress in the past few years: in 2006, there were 137 million Internet users in the country. In 2007, the population grew by 53 percent, and the numbers continue to increase.

Last year, CNNIC revealed that the China’s most popular Internet application is online music (181 million users or 86.6 percent), closely followed by Instant messaging (170 million users or 81 percent). Video (76.9 percent), news (73.6 percent) and searches (72.4 percent) have also ranked high in the list of favorite use of the Internet in China.

Chinese users have had to deal with the censorship for some time now, as the Chinese government has initiated a campaign to put a stop to the threat to social stability the uncontrolled Internet access poses. The “cleaning campaign” includes banning all messages, whether text, audio or video, sexually suggestive, including ads, as well as sites that promote violence, religious cults or unveil national secrets.

As of January 31, Chinese authorities limited the broadcasting of Internet videos to sites ran by the government, so as to avoid any content that could alter the minds of Internet users. In their vision, the Internet audio and video providers “must be resolute in the service of the socialist ideal and of the people.”

While some see censorship as a necessary measure for the Chinese Internet viewers, foreign analysts consider it to restrain freedom of speech and to give a hard time to foreign companies, which may lead to a certain degree of economic instability, as no one knows exactly what to expect and how they will be able to comply with the government’s demands.

SEATTLE - Eagle-eyed investors are looking past Amazon.com Inc.’s double-digit growth in first-quarter earnings to spot signs that the Web retailer is not immune from broader economic uncertainty.

Even as Amazon’s chief financial officer repeatedly said he didn’t see evidence of U.S. shoppers changing habits ahead of a possible recession, analysts Wednesday were crunching numbers to find that the retailer had effectively lowered its sales expectations for the year.

Shares fell $3.59, or 4.4 percent, to $77.41 in after-hours trading. The stock had gained $1.40 to close at $81 before the first-quarter results were released.

“Across the board, I wouldn’t say there are any major red flags, but there are enough yellow flags here,” said Tim Boyd, an analyst for American Technology Research. He pointed to slower sales growth in both major U.S. product categories — books, CDs and other “media” items, and electronics and general merchandise.

Adjusted for the effects of a weak U.S. dollar, growth in international sales slowed down, too.

And while U.S. margins improved, international margins worsened. Amazon said that’s the expected result of offering items in new categories at aggressively low prices from the start.

Far from surprising, Boyd said Amazon’s sales seemed to be “returning to more normal growth” after a stronger-than-usual year in 2007.

Earnings in the January-March quarter climbed 29 percent to $143 million, or 34 cents per share, from $111 million, or 26 cents per share, in the same period last year. Revenue rose 37 percent to $4.14 billion from $3.02 billion in the year-ago quarter.

Both measures beat Wall Street’s expectations. Analysts surveyed by Thomson Financial had forecast, on average, a profit of 32 cents per share on $4.08 billion in sales.

“It is extremely impressive that they were able to grow like this in a difficult economic environment,” Boyd said. “People’s expectations have gotten ahead of what they (Amazon) can actually deliver.”

In a conference call Wednesday, CFO Tom Szkutak downplayed the potential for U.S. economic troubles to hurt the business, despite the fact that 51 percent of revenue came from North America in the quarter.

“We don’t have a lot of data points about the economy specifically, but what we’re seeing in our business is, it’s very solid,” he said. Szkutak declined to answer questions about changes in what people were buying — more staples and fewer extras, perhaps? — or how much they were spending on each transaction.

Looking ahead to the rest of the year, Amazon forecast sales of $19.1 billion to $20.0 billion in revenue, more than the retailer had predicted three months ago. But Boyd and other analysts noted that the new guidance included millions of dollars in sales expected from Audible.com, an audio book company Amazon recently acquired, plus a bigger-than-expected boost thanks to a weaker U.S. dollar.

Factoring in those elements, analysts said Amazon was actually cutting its 2008 sales guidance, not raising it.

Amazon’s operating income guidance for the year — $740 million to $940 million — also came in lower on both ends than the company’s forecast three months ago, by about $45 million.

Szkutak explained that the operating income guidance was depressed by stock option expenses and costs associated with the acquisition of Audible.com.

As for the revenue guidance, “I wouldn’t read too much into it,” he said.

BEIJING (Reuters) - China has surpassed the United States to become the world’s largest Internet-using population, reaching 221 million by the end of February, state media said on Thursday.

The number of Internet users in China was 210 million at the end of last year, only 5 million fewer than the U.S. Internet users then, Xinhua news agency said, quoting the China Internet Network Information Centre.

“Despite a rapidly increasing Internet population, the proportion of Internet users among the total population was still lower than the global average level,” Xinhua quoted the Information Ministry as saying.

The proportion was 16 percent at the end of 2007, compared with 19.1 percent for the world average.

Internet censorship is common in China, where the government employs an elaborate system of filters and tens of thousands of human monitors to survey surfing habits, surgically clipping sensitive content.

But the Internet has most recently become an important tool in countering anti-China protest dogging the Olympic torch relay with an outpouring of nationalism and indignation.

The search engine king Google has announced a new sandbox environment for its iGoogle, the successor of Google Personalized Homepage. The revamping makes iGoogle capable of being configured much like a social network homepage. The new iGoogle makes use of the Google-backed OpenSocial, the API (application programming interface) designed to let developers build social applications that are compatible with an array of web pages that support it.

“iGoogle’s new features will include left navigation, a maximized or ‘canvas view’ option for gadgets, and social features for gadgets using the OpenSocial APIs. These social features for gadgets will include a friends list and activities displayed through a special updates gadget,” Google said.

Late last month, Yahoo joined rivals Google and MySpace to work on the OpenSocial platform, a common set of standards which will enable interoperability. Several business newspapers allege that Yahoo was pondering the move for months but was concerned about Google’s influence over the OpenSocial alliance.

Yahoo decided in favor of joining the open platform after Google made assurances that it will give up its tight grip on the technology. Instead, control was yielded to the OpenSocial Foundation, a non-profit group whose founding members will include Google, Yahoo and MySpace. The new organization will be created within the next three months.

“By building more powerful and interactive gadgets for iGoogle, developers will have an opportunity to share their gadgets with the tens of millions of iGoogle users,” Google said.