Yahoo, Facebook Strengthen Ties Despite Yahoo’s Uncertain Future

Yahoo (NASDAQ:YHOO), struggling to maintain and grow ad revenues as it cedes ground to Google and other Internet giants, Dec. 20 boosted its relationship with one of the very companies that threaten to usurp its visitor base.

Yahoo upgraded its integration with social network superpower Facebook, bringing the news activity feature to 26 more Yahoo Web properties and adding a new notifications feature to alert users to social conversations conducted across Yahoo Websites.

More than 12 million people have opted in to use the news activity feature, which lets users share what they are reading about when users mouse over their Facebook profile photo on Yahoo.

Traffic from Facebook to Yahoo News in the United States has increased 300 percent since it launched in September, said Yahoo Chief Product Officer Blake Irving in a statement. This has not only increased referrals to Yahoo News but lured a younger user base (the 18-to 34-year-old demographic) that Yahoo has been sorely lacking as a legacy Internet company with its roots in the mid-1990s.

Now that feature has come to Yahoo’s U.S. properties omg!, Yahoo TV, Yahoo Movies and Yahoo Games, as well as on Yahoo News sites in India, Brazil, Singapore and Spain.

Meanwhile, the notifications feature, which can be found atop Yahoo News, Yahoo Mail, Yahoo Sports, Yahoo Travel and other properties, gives users feedback on reviews, responses to comments and stock alerts.

When a user clicks on the alert bell icon, a window will pop up showing which Facebook friends have commented on posts and stock updates.

Yahoo Dec. 21 also upgraded Yahoo Livestand for Apple’s (NASDAQ:AAPL) iOS, its crucial magazine-reading application for mobile users.

The refreshed app includes a recipe finder to help users search for new recipes and create handy shopping lists, local deals from Groupon, LivingSocial or Bloomspot, and integration with microblog Twitter to let users tweet links, photos and video content.

Finally, the app now has a “guest mode,” allowing users to tour the app without signing in with their Yahoo credentials.

The Facebook integration and Livestand update pretty much summarize Yahoo’s product efforts in 2011, which has been nothing short of rocky for leadership. Yahoo fired CEO Carol Bartz in September, its third CEO change in years.

Yahoo needs cash. To that end, the board is reviewing whether to sell the company’s holdings in the Alibaba Group of China and Yahoo’s Japanese affiliate back to their majority owners, according to The New York Times.