Here’s how:

Click the Contacts menu and click Import Contacts.

If you import contacts from Microsoft Outlook, depending on your security settings, a pop-up message may appear warning you that a program is trying to access email addresses stored in Outlook and asking your permission to allow it. If this message appears, click the checkbox "Allow access for," leaving the default time of 1 minute, and click "Yes."

Yahoo! Messenger will then present you with a dialogue box containing two lists, one of people who already use Yahoo! Messenger and another of people you can invite to join you on Yahoo! Messenger. A checkbox next to each name lets you to choose who you'd like to add to your Messenger List.