For Blogger platform, labels are even more important for post categorization, than for other platforms, since Blogger template does not allow creating Categories. With growing amount of posts on your blog, the amount of related labels will be growing as well. Soon, it might capture a significant amount of the valuable space on your sidebar, and might create a feeling of the misbalance on your blog interface. Amanda Fazani offered a very elegant solution to save the space and still show the labels on your blog. She has created a widget, displaying all the labels in the drop-down menu. Detailed instructions on the Template modification are presented in the following post:
You can see the practical idea implementation on my sidebar. The process will take no more than 5 minutes of your time. All thanks are going to Amanda Fazani!