One of the new features of the Messenger button is that it incorporates your contact list directly into the button. You can see who's online and contact them directly from the toolbar.
By default, only your online contacts are shown when the Show Offline Contacts menu item under the Messenger button is not checked. To show your offline contacts, select Show Offline Contacts under the Messenger button so that the checkmark appears. To hide your offline contacts again, simply select Show Offline Contacts again.
To contact someone on your Yahoo! Messenger contacts list:
You still have access to your Contact list even if you're not signed in. However, you are prompted to sign in to Yahoo! Messenger if you perform an action (Call, IM, Email, etc.) and aren't currently signed in.
The Messenger button requires Yahoo! Messenger 7.0 or newer. To check the version of your Yahoo! Messenger client, select "About Yahoo! Messenger" from the Messenger Help menu.
If you have Yahoo! Messenger installed but don't have the Messenger button on your toolbar, you can add it to your Yahoo! Yahoo! Toolbar now (this requires sign-in).