The significant changes that Microsoft's Live.com portal makes will take it from a mere search engine to a social network. You can take a peek at their new Windows Live Photos and Windows Live People, as well as other services at Home.Live.com.
Whereas Yahoo's strength is email, Microsoft's is Messenger. It has 268 million users, making it the most popular instant messaging service worldwide (compared to 116 million for Yahoo and 6 million for Google Talk).
Any activity that users build out on their profile is then flowed into Live.com for their friends to see. The presumption is that users will want to hang out at Live.com.
Live.com will have access to a plethora of the usual online services, plus downloaded service like mail client, Movie Maker and Photo Gallery.
Time will tell if Microsoft's entry into social networking will be a success in its ability to compete with other sites like Facebook.