Yahoo plans to shut down its photo service and shift its users to Flickr.

Yahoo has owned Flickr, widely regarded as a web 2.0 icon, since 2005.

In a written statement provided to vnunet.com, the company said it would be gradually phasing out the Yahoo Photos service and moving users over to Flickr.

"Our increased focus on Flickr aligns with Yahoo's mission to connect people to their passions, their communities, and the world's knowledge, while focusing on delivering value to consumers and advertisers," the company said.

"We are making great strides in our ongoing efforts to align Yahoo's
resources and focus on core strategic priorities," said Jeff Weiner, executive vice president of Yahoo's Network Division.

"Part of this progress is today's decision to close Yahoo Photos to better serve our valued customers through Flickr."

The decision to shut down Yahoo Photos may also have its roots in a memo that was leaked to the press last November.

In what has since been dubbed the "peanut butter manifesto," senior vice president Brad Garlinghouse likened Yahoo's current structure to peanut butter spread thinly across a slice of bread and suggested that the company should remove redundant services and narrow its focus. At the time, Garlinghouse suggested that as much as 20 per cent of the company's work force needed to be cut.

An April study by research firm Hitwise ranked Yahoo Photos and Flickr as the number 2 and number 3 photo-sharing sites on the web with a combined market share of 10 per cent. Photobucket dominates the market, claiming more than 40 per cent of photo service users.