Yahoo Will Roll Out Universal Authentication With Y Connect

In a clear sign that Yahoo (YHOO) is accelerating its efforts to join the social media revolution, the company spilled to The Wall Street Journal over the weekend word of a new offering, dubbed Y Connect, which would allow its customers to sign up for and sign onto media sites and other password-protected sites with a single click. Google (GOOG), Facebook and Twitter already offer this type of service, and many social-media watchers believe that these universal authentication systems are the most potent tool emerging from the social media revolution, because they allow advertising networks to track user profiles across the Internet and offer targeted ads based not only on context and inferred intent, but also on user-defined profiles.

In other words, for example, a law firm seeking to hire attorneys could target ads in specific cities to Yahoo users who happen to define law as an interest in their profile.

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At present, Facebook has a huge head start in this arena: Its wildly successful Facebook Connect feature is used by tens of millions of websites and is widely rumored to be the backbone for a forthcoming Facebook advertising network. Also, Facebook has an advantage in that its users offer up richer profiles than do users providing personal data to Twitter or Google, both of which request minimal data from users. Of course, Facebook also offers the "Like" function, which subtly encourages its users to provide it with an extremely valuable profile of their likes, dislikes, demographics and other critical proclivities that's highly useful for targeting ads.

As one of the most popular Web portals and content networks, Yahoo still enjoys enormous cachet among Web users, tens of millions of whom log in to it on a daily basis to check email, read the news, or to use its popular instant messenger system. Yahoo also has a highly regarded suite of display-advertising products that could provide a nifty way for partner sites to serve up highly targeted ads to users who sign on via Y Connect. Without a doubt, anything that can help Yahoo expand its reach beyond its own network sites would be an enormous plus, as both it and rival Aol (AOL) have lagged behind the social media leaders in garnering attention from Web surfers.