SAN FRANCISCO -- The Giants won't drop general manager Brian Sabean, although they will drop their rigid adherence to a win-now approach.

Sabean, whose job security was widely considered to be tenuous, signed a two-year contract extension with a club option for the 2010 season, the team announced Friday.

"I'm deeply flattered," said the 51-year-old Sabean, whose winning percentage entering Friday (.544, 927-777) ranks ninth among all GMs since 1950. "This is a great first step for myself and the staff to get busy and turn our fortunes around."

Sabean had seemed to be on the endangered species list since Spring Training, when Giants owner Peter Magowan said that he would review the GM's performance at the end of the season. The Giants, who haven't reached the postseason since 2003, have fallen to last place in the National League West, intensifying speculation that Sabean's contract wouldn't be renewed.

But Magowan said that he considered Sabean's overall record, which includes four postseason appearances by the Giants between 1997 and 2003.

"I have a very good working relationship with Brian," Magowan said. "I trust him and I believe he trusts me."

The timing of the announcement also was significant, given the proximity of the July 31 trading deadline. Now, Sabean won't feel like a potential lame duck as he plots the franchise's future.

"It puts Brian in a much better position to do what he feels he needs to do in terms of making trades and whatever assessments are necessary to make than would be the case if we were to wait until the October or November time frame," Magowan said. "We can get a running start on the '08 season by making these moves now."

While backing Sabean, Magowan also declared his willingness to infuse his aging roster with youth. This contrasts with the team's recent strategy of surrounding left fielder Barry Bonds with complementary players, which typically has meant adding veterans exceeding age 30.

Adding youth typically means rebuilding, which in turn typically means losing. Magowan emphasized that the Giants haven't already forsaken playoff hopes for 2008.

"But to win," he said, "we'll probably need some pleasant surprises, which we may get given our pitching."

Sabean said that the Giants would remain open to making trades that would bring the team players such as outfielder Randy Winn or right-hander Livan Hernandez -- young yet proven veterans in their late 20s or early 30s who aren't saddled with enormous contracts.

But Magowan said that obtaining "rent-a-players" such as first baseman Shea Hillenbrand, who cost the Giants promising reliever Jeremy Accardo last July, won't happen.

Moreover, having built a competent starting rotation through drafting and developing performers such as Matt Cain, Tim Lincecum and Noah Lowry, the Giants will continue to focus on nurturing their own talent -- especially position players, whom the Giants have struggled to produce in recent seasons. Matt Williams, who played with the Giants from 1987-96, is the last All-Star hitter to rise through the organization. Since Williams' departure, Bill Mueller and Pedro Feliz are San Francisco's lone draftees to have emerged as everyday players.

Magowan said that although the Giants have tried to win and develop players simultaneously in the last several seasons, "I think the emphasis has been more on winning than developing. It's a balance, and the balance is always in flux because you might feel you're just a player or two players away. If you're several players away, you put more emphasis on developing."

Magowan cited the Dodgers, Padres, Braves and Mets as examples of teams possessing a decent mix of homegrown talent and players obtained through free agency or trade.

"We don't have that strength of balance on our team," Magowan said. "We have to strive to try to get a better one in the future."

Magowan's attitude adjustment caused barely a ripple among players. They expected that some sort of change was imminent, given the team's disappointing performance.

"It'd be irresponsible for him not to think that way. That's his job," Winn said.

Winn, who's signed through 2009 and has a no-trade clause, remained committed to being a Giant, even if the organization plans to rebuild as much as reload.

"I signed here to play here. I signed here to win here. I still think we can," he said. "[A fresh approach] is always a possibility when a team that has high expectations and older players gets off to a bad start. I don't think this comes as a surprise to any of the guys in the locker room or any of you [reporters] that they're talking about this."

Left-hander Barry Zito, who's signed through 2013, called the organization's redoubled commitment to youth and the farm system a "great approach" and noted that enduring a losing season is often necessary before a team can right itself.

"Short-term pain, long-term gain," Zito added. "It's not that we're willing to sacrifice [next season]. I think it's just we're not going to kill ourselves to win 100 games in 2008."