Create Dropdown menu for Labels widget

A labels widget displays your posts’ labels and each label is linked to a page containing posts which fall under that label. Usually as your posts increases, so will your labels. If you don’t limit them, sooner or later your labels widget will take over your sidebar!
Fortunately you can prevent that from happening by converting the widget into a a dropdown (or is it a pulldown?) menu. Your labels widget will be reduced to just one line! And it only expands into a full list when you click it.
Before applying this hack, you must already have a Labels widget installed. If you don’t have one, go to Layout (old UI: Design > Page Elements) and add it.
Now let’s make the dropdown:

1. Go to Template > Edit HTML > Proceed (old UI: Dashboard > Design > Edit HTML).
2. Back up your template.
3. Make sure you DO NOT check the  Expand Widget Templates checkbox.
4. Look for the following lines in your HTML code:

   <b:widget id='Label1' locked='false' title='Labels' type='Label'/>

5. Replace that line with this code:

   <b:widget id='Label1' locked='false' title='Labels' type='Label'> 
   <b:includable id='main'> 
   <b:if cond='data:title'> 
   <h2><data:title/></h2> 
   </b:if> 
   <div class='widget-content'> 
   <select style='width:100%' onchange='location=this.options[this.selectedIndex].value;'> 
   <option>Click to choose a label</option> 
   <b:loop values='data:labels' var='label'> 
   <option expr:value='data:label.url'><data:label.name/> 
   (<data:label.count/>) 
   </option> 
   </b:loop> 
   </select> 
   <b:include name='quickedit'/> 
   </div> 
   </b:includable> 
   </b:widget>

   • Change the width of the dropdown menu bay changing 100% to any percentage, or pixel (px).
   • You can change “Click to choose a label” phrase in line 8 to your preferred phrase.
   • Code line 11 is for post count, if you do not want to show post count at the end of each label, delete this line.
6. Preview before saving.
7. Congratulations you have shrunk your labels widget and created more space. 
8. Enjoy!