The firm has reached an agreement with the attorneys general of New York and Nebraska to allow it to implement controls over chat rooms where users link up with children, view them on webcams and arrange meetings.

If the company does allow user-created chat rooms, it will screen them for sexual content under the terms of the new agreement and remove them within 24 hours if they are deemed offensive.

"We need to be vigilant to protect our children," he said. "It is imperative that parents, industry, prosecutors and lawmakers work together to identify and address possible threats, and that we teach our children to protect themselves from those who would do them harm."

In June Yahoo removed or barred the posting of approximately 70,000 user-created chat rooms whose names suggested that they facilitated illegal conduct, including promoting sex between adults and minors.

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