In a statement, Microsoft said it's "unfortunate" that Yahoo "has not embraced" its proposal to combine the two companies, and the rejection of the offer "does not change our belief in the strategic and financial merits of our proposal."

The company also hinted that it may take the offer directly to Yahoo's shareholders, a move that could result in a hostile takeover.

"As we have said previously, Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo's shareholders are provided with the opportunity to realize the value inherent in our proposal," Microsoft said in its statement.

Earlier Monday, Yahoo formally rejected Microsoft's bid to acquire the company in a half-stock/half-cash purchase, saying it undervalued Yahoo.

A small but vocal minority on Flickr are already staging online protests at the prospect of a Microsoft takeover. Flickr is one of several popular Web 2.0 websites owned by Yahoo that loyal users fear will suffer under Microsoft ownership.

As soon as the news hit the wires that Microsoft is proposing a $44.6 billion bid for Yahoo, Flickr users began posting anti-Microsoft images, satirical "Flickr Live" logos and announcing they will abandon Flickr if it falls into Microsoft hands, fearing such a move would mark the beginning of the end.

"Well then, I'm outta here!" announced one Flickr user who goes by the name Judland.

While Microsoft has established its dominance on the desktop, its web properties lag behind those of Yahoo and others.

When it comes to building or acquiring hip, community-focused websites, Microsoft has fumbled where Yahoo has thrived. Last year, Microsoft tried its hand at a community site to compete with Flickr by adding photo-sharing capability to its Windows Live web service. But Windows Live Spaces doesn't have the cutting-edge user interface or the Web 2.0 cache that Flickr has. It also doesn't have the closely-knit community of passionate users that makes Flickr so successful.

The firms are supporting the emerging standard known as domain keys, which block fake e-mails by validating the sender with a digital signature.

Spammers hide their identity by using a false, or spoofed, address in the millions of messages they send out.

The technology, called the DomainKeys Identified Mail (DKIM), will be available to millions of Yahoo Mail users worldwide in the coming weeks.

It is a big step forward for consumers in defence against the bad guys," John Kremer, vice president of Yahoo Mail, told Reuters news agency.

Several ways. First, it can allow receiving companies to drop or quarantine unsigned email that comes from domains that are known to always sign their emails with DomainKeys, thus impacting spam and phishing attacks. Second, the ability to verify sender domain will allow email service providers to begin to build reputation databases that can be shared with the community and also applied to spam policy. For example, one ISP could share their "spam vs. legit email ratio" for the domain www.example.com with other ISPs that may not yet have built up information about the credibility and "spamminess" of email coming from www.example.com. Last, by eliminating forged From: addresses, we can bring server-level traceability back to email (not user-level - we believe that should be a policy of the provider and the choice of the user). Spammers don't want to be traced, so they will be forced to only spam companies that aren't using verification solutions.

Caterina Fake knew she was onto something whenone of the engineers at her Vancouver, British Columbia-based onlinegame start-up created a cool tool to share photos and save them to a Web page while playing.

"It turned out the fun was in the photo sharing," she says.

Fake scrapped the game. She and her programmer husband, Stewart Butterfield, transformed the project into Flickr. In less than two years, the photo-sharing site - now owned by Internetgiant Yahoo - has turned into one of the Web's fastest-growing properties.

"Had we sat down and said, 'Let's start a photo application,' we would have failed," Fake says. "We would have done all this research and done all the wrong things."

The web-based reality series will run across several sites on the AOL network, including AOL.com, AIM.com, Moviefone.com, and MapQuest.com. Challengers will be able to hunt for clues across the sites and look for hidden treasure buried across the United States.

The clues and the online reality show will also be promoted on television, print, and cell phones. Mr. Burnett said he was amazed by the number of fans who communicated online about his TV series.

He believes that with more people able to watch content on their computers during the daytime, the hours from 9 a.m. to 5 p.m. could become the equivalent of the next prime time on the TV programming schedule.

Gold Rush! will begin with 13 trucks containing solid gold, burying 13 caches of lucre around the United States, according to Mr. Burnett in an interview Tuesday. Clues regarding the whereabouts of those caches will be embedded online through the AOL web sites and other media.

Yahoo will effectively act as the preferred provider of Movable Type for small business users, taking advantage of its scale and efficiency, Anil Dash, vice president of professional products for San Francisco-based Six Apart, said in a phone interview.

"This is going to be our recommended (sales) channel for small business," he said.

Sunnyvale, California-based Yahoo said it will offer commercial blogs based on Movable Type as part of its existing small business Web-site management service.

Yahoo provides customers with a unique Web address, blogging tools and business-class e-mail services with spam and virus protections for less than $12 a month.

In a few short years, users can expect to make telephone calls for free, with no per-minute charges, as part of a package of services through which carriers make money on advertising or transaction fees, eBay's chief executive said on Wednesday.

Seeking to justify eBay's $4 billion purchase last week of Web-based communications phenomenon Skype Technologies, Meg Whitman countered criticism by a financial analyst during the company's quarterly conference call by agreeing with some of his points.

"The percentage of users that you can actually charge for (phone services) will actually go down, so I actually agree with that and we understood that when we looked at Skype," Whitman said in responding to the analyst's question.

"In the end, the price that anyone can provide for voice transmission on the 'Net will trend toward zero," eBay's top executive said.

Now, angered by a new requirement to tie their member profiles with Yahoo accounts, some Flickrites say they plan to kill off their identities before they can be moved into the new family next year.

"If Flickr really forces me to join Yahoo in 2006 in order to still use my account, I will quit 24 hours before the deadline," wrote Thomas Müller, a Hamburg, Germany-based artist who shows more than 1,400 photos at the site. On Wednesday, Müller created a protest group, Flick Off, that has attracted almost 400 members.

Google based its software on open standards, so it will work with smaller networks that are based on the same technology. Text messages can be exchanged with users of Apple Computer Inc.'s iChat, Cerulean Studios' Trillian and the open-source Gaim program.

Google also is inviting programmers to build its technology into their software.

"It means other people and developers will be able to add value to our network by being able to add this to computer games, productivity applications and anywhere else they want," said Georges Harik, director of product management at Google.

The new Google program features a basic user interface with few graphics, much like the main Google search site. It does not spawn pop-up windows or display ads like America Online's Instant Messenger.

HotJobs is using Yahoo's Web crawling technology to search for job openings listed on employers' Web sites and other sites. It then "scrapes" those listings into its own database, where it can share them with its users for free.

The move is significant because it is the first time one of the big three leading job sites -- HotJobs, Monster and CareerBuilder -- has incorporated free listings into its database. Until now, the three have required payment from employers, and that's what keeps them in business.

HotJobs is offering the free listings partly in response to competition and to increase its market share. But analysts say the free scraping could undercut the paid business, even though some employers will still pay money for other services, deeper relationships with prospective employees and higher rankings on the page.

Among the five major search sites -- Google Inc., Yahoo Inc., MSN, America Online Inc. and Ask Jeeves Inc. -- Yahoo and Ask Jeeves were cited for making their headings fainter and their disclosure statements harder to find.

"If you want to call attention to something on a page you put headline above it, [but] you don't make it smaller and more faint," said Beau Brendler, director of Consumer Reports WebWatch.

Yahoo also received the most criticism about its paid inclusion program, since it is the only engine among the top five to still use the practice, and because one way it charges included sites is based on the number of clicks on their listings.

Time Warner (TWX ) has decided that it's go-for-broke time at AOL, as the beleaguered online division launches a last-ditch gamble for survival. To generate growth even as its Internet service loses subscribers, the online company is launching one of the most radical strategic shifts in years -- throwing open its content for free in a bid to cash in on a gusher of online-ad revenues.

The refurbished aol.com is taking a different approach than the other big portals, such as Yahoo! (YHOO ) and Microsoft's (MSFT ) MSN, which hit their stride before broadband usage took off. AOL's site, to launch in July, will put streaming video and audio content front and center -- including exclusive live concerts, celebrity interviews, and film shorts.

America Online, with 28 million members, has assigned a full-time employee to handle next-of-kin requests. Before releasing account information, the company requires a copy of the death certificate and documentation proving the person requesting the e-mail information is the legal beneficiary or the estate representative, said America Online spokesman Nicholas Graham.

MSN Hotmail will provide account contents on CDs or floppy disks to relatives of deceased members after it verifies the legitimacy of the request, said Brooke Richardson, MSN lead product manager, in a statement. ``We have tried to institute a policy that is very focused on privacy, but at the same time honors the requests of bereaved family members.''

After Lance Cpl. Justin Ellsworth of Michigan was killed Nov. 13 while inspecting a bomb in Iraq, his father, John Ellsworth, wanted access to his son's Yahoo email account. But Yahoo, whose policy is to terminate email accounts upon a user's death, would not give him the material until a probate judge ordered the Sunnyvale company to do so.

Danny O'Brien of the Electronic Frontier Foundation, a San Francisco non-profit that often gets involved in digital-privacy issues, said it's difficult to find the right balance between personal privacy and a family's desire to get all of a loved one's possessions.

``We are sympathetic to the pain families go through,'' he said. ``On the other hand, there are a lot of things people want to keep private from their close relatives. You need to have some way to do that.''

"What these social networks have shown is that you can use the viral capabilities of the Internet to grow a site very quickly, but I'm not even sure that anybody has proven yet that these businesses by themselves are sustainable, stand-alone businesses," said David Card, an analyst at Jupiter Research.

Friendster was the first popular social networking site, which typically offers users ways to create personal pages, post digital pictures, and invite people to link with them on the Website.

Friendster logged 703,000 visitors to its site in April, a 15 percent drop from the year-ago month and the average visitor spent 14 minutes on the site that month, down 65 percent year over year, according to Nielsen/NetRatings. By contrast, MySpace boasted 8.2 million visitors in April, who spent an hour and 23 minutes on the site.

Entrepreneurs who enter the Think Big contest will have their business plan evaluated in a three-round process. The entries will be judged on the novelty of the business and its ability to attract a national audience; the design and navigability of the Web site, as well as its ability to generate and convert traffic into customers; and an essay that offers a compelling business plan that also demonstrates the entrepreneur's knowledge of business fundamentals.

Google's Labs and API were held up as exemplars of a modern internet business, while Yahoo was seen as floundering in a sea of accountants, pop-up ads, and Britney Spears. But Yahoo has learned its lesson. Research.yahoo.com, launched last month, is the same idea as labs.google.com - a showcase for new and interesting projects - but it's better. Unlike Google, Yahoo publishes its papers, names its researchers and says what it is up to. One-nil to Yahoo.