In June 2005 Yahoo! acquired upstart Canadian photosharing web site Flickr and the web hasn't been the same since. Yahoo, on the other hand, didn't change nearly as much as everyone expected it to. Pre-CEO Jerry Yang told then-Business 2.0 writer Erick Schonfeld six months after the deal "I look at Flickr with envy, it feels like where the Web is going."
Flickr co-founders Caterina Fake and Stewart Butterfield have now cashed out and officially left the company. Though Yahoo! doesn't appear to have internalized many of the lessons of Flickr, it's not too late for the rest of us to look at those same key lessons for inspiration in our work on the web.
There's a lot of photo sharing services on the web, but here's where Flickr stood. Flickr was the trailblazer, the high-profile media darling and one of the first major Web 2.0 acquisitions. Webshots was much older, had been bought and sold for twice as much money but never embodied the social media ethos the way Flickr did. PhotoBucket is a year older than Flickr, has always been much larger and was acquired by Fox for almost 10X Flickr's pricetag in the same week that Flickr was pegged to replace the entire Yahoo! Photos property.
We've been critical of some of Flickr's strategies around everything from censorship to data portability, but the big picture is that the service is fantastic. Even though it wasn't the first and it wasn't purchased for a particularly large sum (est. $35m) Flickr is still the beacon of innovation in this sector. Here's why.
One of the most important elements of Flickr's early success was its incredible engagement with its users. Flickr management spent what might have seemed like a totally unreasonable amount of time welcoming new users to the site, participating actively and promptly in forums and highlighting the best photos uploaded.
That kind of engagement can turn passing early adopters into ongoing community stakeholders and advocates. It's something that any startup could benefit from emulating and a role we're seeing formalized in an increasing number of companies hiring community liaisons.
Flickr proved that experimental, bleeding edge web 2.0 features didn't have to be limited to early adopters. When Flickr brought geo-tagging, the addition of location data to photo metadata, onto the site - more than 1 million photos were geotagged in the first 24 hours. Now that location aware services are heating up, who's in one of the best positions to serve media up in that environment? Flickr is.
Flickr's APIs have been wildly successful. Mashup and API directory site ProgrammableWeb lists more mashups using Flickr APIs than any other API on the web, short of Google Maps. More than Amazon, more than eBay, more than YouTube.
Flickr's FlickrAuth user authentication API was a key model for the standards based oAuth protocal - now employed by Google's OpenSocial and hopefully soon by countless other applications.
Flickr broke new ground in numerous ways and proved that technical experimentation didn't have to remain in the early adopter niche.
Butterfield wrote a great letter of resignation, which was leaked to the bottom feeders at Valleywag but is a great little read none the less. All parties say it's hardly out of character and indeed, in my own passing interactions with the man, he was never a fakely-nice typical business type worried about what might come around someday from being nasty to any little blogging piss-ant that got in his way.
Flickr came from Vancouver, British Columbia - in Canada. They must be the national web 2.0 pride and joy of that freakishly wonderful country.
The next time someone gives you a hard time for being a freak at work, just cluck at them knowingly and think about Flickr.
Other people have raised other issues that they think are key to learn from the situation as well. Flickr power user and exec at rival startup Zooomr Thomas Hawk offered some obviously heart-felt feelings about what the Flickr story said about acquisition and innovation.
(In response to Hawk's comment, Robert Scoble humorously replied that Yahoo! "reminds me of Podtech. Had lots of superstars under their roof and then couldn't listen to them to make things happen.")
Dave Winer told us that the move makes him concerned about all the data that users have entrusted to Yahoo! "Whatever emerges from this, the new company should immediately embark on a program to make users' data portable," Winer said. "Users have been an abstract thing to Silicon Valley, it would be great if now that the superstars are leaving Yahoo, the industry could turn to the users for inspiration, and start to trust them with their own work."
Flickr's handling of user data was generally accepted as a fairly good work in progress. Now that the original minds behind the company have left the building, it would be great for the new leaders there to cement user trust in regards to their data by instituting some formal, easy-to-use measures for users to make sure their photos are safe and secure.
It would be fantastic to see Fake and Butterfield start something new but they're certainly due all the relaxation time they want, too. Once you've got a few million dollars in the bank, though, starting more internet businesses may be a sign of limited imagination more than anything else. For the rest of us still plugging away, Flickr offers some great inspiration.
We're sure there are readers here who have been much more engaged in the Flickr community than we have. What kinds of business lessons have you learned from the company?
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Flickr certainly didn't invent the notion of oAuth-style third-party authentication, and Google certainly weren't the first ones to adopt it after Flickr was acquired.
You might want to have a look-see at BBAuth, which was released by my team in 2006, about a year after the Flickr acquisition: http://developer.yahoo.com/auth/
Google was literally years behind many others in their adoption of open authentication protocols.
(NB: it's spelled "protocol.")
Posted by: Jeffrey McManus | June 18, 2008 1:43 PM
Well, I only surf with www.treehoo.com the site that plants trees for most of its profit to fight global warming and climate change. People in 72 countries are doing it!
Posted by: James McMahon | June 18, 2008 2:10 PM
"Once you've got a few million dollars in the bank, though, starting more internet businesses may be a sign of limited imagination more than anything else."
Yeah, limited imagination, that's it. They should take up collecting Asian artifacts or bungee jumping instead?
Posted by: Dave Evans | June 18, 2008 3:28 PM
Oauth was an attempt to copy flickr auth, kellan who is at flickr spent a lot of time on the oauth spec to make it so. That was the intention. It was also the intention to avoid the numerous mistakes made in BBAuth, which was an example of yahoo not being able to learn from flickr.
Posted by: rabble | June 18, 2008 3:56 PM
I think it is a brilliant resignation letter. I wander what was Brad's reaction while reading the letter!!
Posted by: Fabian Schonholz | June 18, 2008 4:54 PM
Lessons? Flickr was a failure.
They sold for too low, and never made the impact on Yahoo! that people predicted.
And Yahoo! never had the impact on Flickr that people predicted. Yahoo didn't ruin the service, but they didn't make it the #1 service in its category either.
Posted by: Hashim Warren | June 18, 2008 5:03 PM
It is to easy to pick on Yahoo.
The Masked Millionaire
Posted by: The Masked Millionaire | June 18, 2008 6:00 PM
The resignation letter was stupid. It wasn't funny at all. I'm sure the powers at Yahoo are glad to see this chuckle head go.
The Masked Millionaire
Posted by: The Masked Millionaire | June 18, 2008 6:08 PM
If only we could all fail like Flickr. The world would be a much better place. To this day, I think you'd be hard pressed to find a more influential, well designed, or valuable site on the web, and that deserves to be celebrated.
I await to see the mark you leave on the world Hashim. (Or was that comment it?)
Anyway, not to leave it on a negative note. Congrats to the whole Flickr team, new and old. Looking forward to what's next.
Posted by: Leonard | June 18, 2008 6:10 PM
Marshall,
Hold on just a second before you go rewriting history! I am a huge Flickr fan and user of the service, but please leave the trail-blazing and pioneering label where it is due and that is squarely with Webshots.
As a founder, engineer, and later CEO I can assure you that Webshots was decidedly Web 1.5 and laid the foundation for many of the wonderful things that have come since.
We were enabling the sharing of photos over desktops before digital cameras were even in common use (1995). In 1999 we launched made the critical decision to make photo-sharing *public* unlike services that came after (Ofoto, Shutterfly, etc.) and in doing so began one of the original pillars of user generated content. There was a point in 2002 when the public Webshots archive would have been 15% of the entire Google image index!
In the social realm, Webshots launched friend connections in the form of "Favorite Members" back in 1999 and with LiveJournal were the antecedants to social networking sites. Webshots photo ecards were a viral and social sharing mechanism that placed Webshots in the top 4 in the ecard vertical for a long period of time.
Webshots was also notably one of the first mainstream services built on a LAMP stack when Sun and Oracle were used by all large properties.
Finally did something most Web2.0 sites don't do and that was make money ;-)
Posted by: Narendra | June 18, 2008 8:02 PM
@Jeffrey McManus, It seems that the Flickr API came out in August 2004 and it seems it must have had some sort authentication back then
http://blog.flickr.net/en/2004/09/24/flickr-api-news/
It seems you should know about all this from your work at yahoo, but a least from my point of view around 2005/6 time Flickr were the only big people doing this kind of authentication - so I would say they at least popularized it.
Posted by: Richard Cunningham | June 19, 2008 2:57 AM
thanks
Posted by: çanakkale evden eve | June 19, 2008 5:25 AM
that resignation letter is one of the funniest things I have ever read...
Posted by: todd g | June 19, 2008 7:02 AM
I was at Adobe attempting to drive various online sharing efforts during the time that Flickr launched (an effort that might best be compared to beating one's head against a wall), so I looked at this space in some depth during the time before and soon after Flickr's launch.
I think one of the big reasons Flickr was successful is that it offered an open API to access the photos, which made it the default source of photos for any experiment that needed an online source. That got it lots of adoption in all sorts of cool places and helped generate the Flickr buzz.
Flickr also did something very unusual -- it targeted a usage pattern that anyone who understood the demographics and preferences of the existing photo mainstream would never have chosen. The bulk of photo sharing is driven by families with young children, and that's the demographic that services like ofoto and shutterfly targeted. In this demographic, the idea of public sharing, and of tagging other people's photos, is nuts.
Flickr found a new demographic that was interested in doing things with photos that just hadn't been done before in any high-volume way. That's something that takes fresh thinking, and boldness, and a bit of luck (and that a company like Adobe can almost never do).
Posted by: Michael Slater | June 19, 2008 9:25 AM
Thank U Marshall for giving Flickr the Full Props it so richly deserves!! At risk of repeating myself Flickr is Thee Shining Light of the Web2.0 Universe!!
+ U have pointed out some excellent reasons why* listening to their Users stands out among Corporate Companies* When is the last time U heard the President of a Company address Users concerns or wishes Directly? Certainly not ever from the Old Dinosaur Companies like Microsoft/POOP or any of the Rich Clowns in the Fortune 500 Corporate Ivory Towers*
Not only that Flickr is simply a Joy to Use! It's EZ + all People can do some really c0ol Stuff + it Works!! Whatta Concept!! Ever tried Printing out a Single Mailing Label with yer MicroPOOP Word - Exactly!! 40 Sheets of Labels + Hours Pulling yer Hair Out + trying to Find an Answer in Help or god forbid the Manual!! Oh yoy*
yeah Yahoo! got the Steal of the Century with Flickr + yer right they Never Capitalized on it*
I really thought with Caterina Fake doing Brickhouse U would start to see a lot of New + Exciting Web2.0 Hacks + Apps rolling out but no??
Bizarre*
Thank Heavens for Flickr* ;)) Peace*
Posted by: BillyWarhol | June 21, 2008 12:09 PM