SAN FRANCISCO (Reuters) - Yahoo Inc said on Sunday it was giving its e-mail users more ways to reach friends and online contacts by allowing them to trade messages with mobile phone users.

The new e-mail-to-phone connection is one of the features the Internet media giant plans to add as it makes available to the more than 250 million Yahoo Mail users a new version of the world's most popular e-mail program in coming weeks.

The Yahoo Mail overhaul is part of a drive to transform its e-mail franchise into more of a social activity that blends the convenience of instant communication with the implicit network of relationships found in one's online address book.

Already this year Yahoo has been testing another feature that lets its e-mail users communicate using conventional e-mail or via instant messages using either Yahoo Messenger or Microsoft Live Messenger.

"Our goal is to make (Yahoo) Mail a more social experience," John Kremer, vice president of Yahoo Mail, said in a phone interview. "We really look at ourselves as sitting on top of the largest dormant social network out there."

Kremer said by upgrading the e-mail service technology, the Sunnyvale, California-based company aims to lay the groundwork for adding more social-networking features later this year.

Yahoo is scrambling to make its services more relevant as many Internet users spend more and more time on social networks like MySpace, YouTube and Facebook and less time passing through portals like Yahoo, AOL.com or Microsoft Corp's MSN.

The new version of Yahoo Mail gives users three options for communicating with contacts -- e-mail, online instant-messaging or text-messaging to mobile phone users. Users can switch between the three, depending on which is most convenient.

Initially, the text-messaging feature will be available to Yahoo Mail members in the United States, Canada, India and the Philippines. To text a friend, users simply enter a mobile phone number, type a text message in Yahoo Mail and hit send.

Yahoo Mail had 254 million users in July, according to audience measurement firm comScore Inc, while Microsoft Windows Live Hotmail had 224 million. Yahoo Messenger was used by 93 million in July.

Yahoo plans to make its upgraded e-mail program the standard option for all new users of the free service. It will upgrade users worldwide over a six-week period, Kremer said.

Existing users will be prompted to upgrade, although users of slower dial-up connections or those comfortable with Yahoo's "classic" e-mail can continue to use the older version.

The key difference with the older e-mail program is how the new service lets users "drag and drop" e-mail into folders, speeding the time it takes to sort through incoming messages.

Search features are also improved, allowing Yahoo Mail users to narrow results to find a specific sender, folder, date, attachment type or message status. So a search can, say, find all photos in Yahoo Mail tagged with a person's name.

In the United States, Yahoo Mail will detect dates, addresses and proper names and allow users to link quickly to Yahoo Calendar, Yahoo Maps or Yahoo Search for that data. The look-up feature is optional and can be turned off.

October is the 10th anniversary of Yahoo Mail's launch.