By Oliver Ryan

(FORTUNE Magazine) – WHEN YAHOO SPENT A REPORTED $20 million to $30 million in March to buy Flickr--a photo-sharing website run by a husband-and-wife team in British Columbia--two aspects of the tiny deal raised eyebrows: First, Yahoo already had the most popular photo-sharing site around. Second, and more important, instead of merging Flickr with its existing photos team, Yahoo placed Flickr in its search group.

The deal, it turns out, was a salvo by Yahoo in the evolving web war over search technology. The company wants to take the trendy concept of online social networking--most recently in the news after Rupert Murdoch spent $580 million for combine it with its search technology to challenge Google's lucrative information-seeking dominance. "We believe it's the next wave," says Bradley Horowitz, the Yahoo executive who championed the Flickr acquisition.

So how does it work? Flickr members create personal pages--viewable by everyone on the Internet--to which they can upload their photos and "tag" them with keywords. By clicking on a tag, anyone can search the site's 60 million photos for, say, "autumn foliage." This effectively converts Flickr into a self-governing amateur photo archive. The site is also a community: Members can sign up to automatically receive each other's photos as they come online, and Flickr "groups" have formed around specific types of photography. Graffiti Archaeology, for example, comprises 520 members who share time-lapse photographs of graffiti-covered walls.

What does all this have to do with search? A month after it absorbed Flickr, Yahoo's search group released MyWeb 2.0, which applies the Flickr approach to Internet bookmarks. Users can save, tag, and share website URLs. Should one MyWeb 2.0 member tag a page on, say, "fuel cells," it becomes available to all who click on the tag. The idea here is not entirely new--MyWeb 2.0 follows in the path of, a site that grew up with Flickr and pioneered the concept of social bookmarking. But both and MyWeb 2.0 offer a revolutionary approach to search. Essentially, they are open-source versions of Yahoo's original hand-built directory, which once relied on hundreds of web surfers to manually assemble lists of sites. As the Net exploded, automated search supplanted the directories.

The innovation: By allowing users to share their tagged bookmarks, the site effectively transforms its 200,000 users into web librarians. Though quirky, it can be effective. The "fuel cell" tag on, for example, delivers 597 well-targeted sites. An equivalent Google search generates 29 million results, many of them old or unrelated. And just as on Flickr, users can subscribe to a continually updated list of bookmarks related to a given person or tag.

Yahoo hopes it can trump Google someday by combining MyWeb's shared bookmarking with Yahoo's existing search engine. Users get conventional search results, with those that have been tagged brought to the head of the list. MyWeb 2.0 is still in its early stages. Yahoo's Horowitz refers to it as a "petri dish" for the company's search experiments, and it's unclear whether users will take to "social search." Still, the concept seems to have more than a flicker of a chance.