Yahoo will close its Yahoo Photos service in favour of photo-sharing site Flickr. Yahoo bought Flickr just over two years ago. Flickr is considered by many experts to be a pioneer of Web 2.0.

"People are changing the way they use photography, and we have decided to shift our focus accordingly," said a Yahoo spokeswoman said via email.

"Digital photography is evolving from its original purpose as a means to preserve memories into a social activity that allows people to communicate and connect."

The move doesn't come as a complete surprise. Yahoo underwent a significant reorganisation in December to better focus its efforts. Weeks before the reorganisation, a scathing internal memo had leaked.

It said Yahoo had to stop spreading a thin layer of "peanut butter" across myriad opportunities and instead focus on key areas. In that memo, Yahoo Photos and Flickr were specifically highlighted as an overlap example.

Still, until now, Yahoo executives had maintained publicly that Yahoo was big enough for the two services because they served two different types of users. In March, Flickr co-founder and general manager Stewart Butterfield told us that there are fundamental differences in the way users of Flickr and Yahoo Photos act online.

"It's not like young people use Flickr and old people use Yahoo Photos. The age range is actually pretty similar. It's more about how people feel about sharing their lives online and even more simply about how into the internet people are.

"The Flickr user is more interested in interacting, in the community aspects," he said.

Yahoo Photos users would rather share their photos with a limited circle of friends and family than with a broad audience. The service got a major upgrade in mid-2006 when its user interface gained drag-and-drop functionality and users got the ability to tag photos with descriptive labels and comments.

Flickr had pioneered these sharing and tagging features in 2004, and quickly became a poster child for the Web 2.0 era of community-oriented sites that foster user interaction, contributions and participation. It revolutionised online photo sites and remains the perceived innovation leader in this market.

"It also has the dubious distinction of starting the trend of naming internet start-ups with names that omit their final vowel and end in "r."

Yahoo launched Yahoo Photos in 2000 and acquired Flickr in March 2005. Although Flickr is considered the hipper, more technically advanced one, Yahoo Photos has more monthly unique visitors with 31.1 million to Flickr's 28.4 million, according to comScore Networks. Flickr has almost 8 million registered members and 485 million photos.

The reaction of Yahoo Photos users remains to be seen. Yahoo will keep the service operational for another three months and will provide migration services to Flickr as well as to third-party services like Shutterfly, Kodak Gallery, Snapfish and Photobucket. As an incentive, users who choose Flickr will get a free three-month subscription to its paid membership level.