Flickr Bickr

Gizmodo on Yahoo's long and lingering strangulation of Flickr, as a case study of what happens when you get Bought by a Behemoth - from:

three years ago, of course Flickr was the best photo sharing service in the world. Nothing else could touch it. If you cared about digital photography, or wanted to share photos with friends, you were on Flickr.

To...

The site that once had the best social tools, the most vibrant userbase, and toppest-notch storage is rapidly passing into the irrelevance of abandonment. Its once bustling community now feels like an exurban neighborhood rocked by a housing crisis. Yards gone to seed. Rusting bikes in the front yard. Tattered flags. At address, after address, after address, no one is home.

How? I found this quite interesting as I've done this role from both sides. Gizmodo argues there were 3 main mechanisms:

Firstly - the Incoming Conditions set the scene

When a big company gobbles up a smaller one, often only a fraction of the money is handed over up front. The rest comes later, based on the acquisition hitting a series of deliverables down the road. It's similar to how incentives are built into the contracts of professional athletes, except with engineering benchmarks instead of home runs. Corp dev sets these milestones. They reflect the reason for the acquisition, and how the company—in Flickr's case, Yahoo—can leverage them.

Secondly, Integration takes precedence over new features

An acquisition integration team begins working immediately to make sure they are met. Typically, they're very engineering-based, designed to integrate the smaller company's product into the enormous corporate machine. And because payment schedules are based on achieving those CorpDev terms, it means both companies have a vested (pun intended) interest in putting those milestones ahead of new features.

Thirdly, Big Companies don't feed the small growing businesses - its not in their DNA

"The money goes to the cash cows, not the cash calf," explains one former Flickr team member. If Flickr couldn't make bucks, it wouldn't get bucks (or talent, or resources)

Gizmodo argues that as a result of being resource-starved, "Flickr missed boats - on local, on real time, on mobile, and even ultimately on social—the field it pioneered. And so, it never became the Flickr of video; YouTube snagged that ring. It never became the Flickr of people, which was of course Facebook. It remained the Flickr of photos. At least, until Instagram came along. The Flickr team was forced to focus on integration, not innovation".

Same Old Same Old Tale. Google and Jaiku (remember that - Twitter's competitor once), Facebook and Instagram?

And yet, and yet. I knew some of the Corp Dev people, at Yahoo at that time, I'd even worked with a few before - they knew their stuff, they knew how to structure deals that didn't strangle the growth businesses they bought. And strategically the company was on board big time - as the article admits, in 2005 Yahoo made a number of innovative acquisitions, not just Flickr:

It's hard to remember, but back in 2005, Yahoo seemed like it had its game on. After losing out on search dominance to Google, it snapped up a bunch of small-but-cool socially oriented companies like Flickr (social photos), Delicious (social bookmarking), and Upcoming (social calendaring). There was a real sense that Yahoo was doing the right thing. It was, to some extent, out in front of what would come to be widely known as Web 2.0: the participatory Internet.

And looking back at Flickr stories on Broadstuff at the time, Flickr was patenting "Interestingness" algorithms in 2006, and soon after it limited the number of friends one could have, and tags per picture. These did not go down well at the time, we reported, so blaming errors on Yahoo Management only may be a bit simplistic.

Anyway the article then argues that Flickr failed in two ways:

Firstly, they didn't understand Community:

"By the time we were looking at Flickr, Yahoo was getting the shit kicked out of it by Google. The race was on to find other areas of search where we could build a commanding lead," says one high ranking Yahoo executive familiar with the deal. Flickr offered a way to do that. Because Flickr photos were tagged and labeled and categorized so efficiently by users, they were highly searchable.

"That is the reason we bought Flickr—not the community. We didn't give a shit about that. The theory behind buying Flickr was not to increase social connections, it was to monetize the image index. It was totally not about social communities or social networking. It was certainly nothing to do with the users."

I don't fully believe that fully, I saw some of the business cases soon after purchase, and spoke to some of the people. The Yahoo guys in Corp Dev understood all about Community. I am prepared to believe that - as in any large Corp - that not everyone else did. The question is how influential were they - bear in mind at the time Yahoo had the biggest existing "Web 1.0" social network, Yahoo Groups.

The other problem, says Gizmodo, was when Yahoo moved Flickr to a single sign on - the idea was that signing onto Yahoo got access to all Yahoo's services plus all the other new sites thay had bought, and levearged Yahoos existing multi country sign on acpability, something that Flicktr would otherwise have had to build. But this upset the Flickr uber-users:

Although Flickr grew tremendously with the huge influx of Yahoo users, the existing community of highly influential early adopters was infuriated. It was an inelegant transition, and seemed to ignore what the community wanted (namely, a way to log in without having to sign up for a Yahoo account). This was the opposite of what people had come to expect from Flickr. It was anti-social. And it very much delivered a message, to both users and to the team at Flickr: You're part of Yahoo now.

So - simplify the product experience, integrate it with many other services, massively increase the user base - a Good Result, surely? No, this is Not a Success because you have pissed off your small cadre of original users.

But in reality, all products have to go through that phase when they cross their Chasms (remember Digg?). I know it could have been done more sensitively (and was done in fact for other Yahoo acquistions), but I think the real problem is noted further down in the article - Social 1.0 got blindsided by Social 2.0

By mid-2008, a year after the RegID debacle, it was clear to most everyone that Facebook was the big up-and-coming social network. What had been a plaything for college kids and high schoolers was suddenly the network your mom, your dad, your gym coach, and everyone else you'd ever met was sending you friend requests from. Microsoft was pumping money into it, and it was fast approaching 100 million users.

Inside Yahoo, which itself had a massive user base and multiple social products, some were already warning that it was going to be bypassed in social just as it had been bypassed in search.

Now, remember Yahoo tried to buy Facebook at about this time, so again its clear they knew how the land lay. They knew what was coming. But the Flickr community (and staff) were 1.0 hippies, and as Flickr had it had already had its Liquidity Event, it was no longer the place to go for the hottest talent:

"Flickr wasn't a startup anymore," explains [a Yahoo] engineer, "people didn't really want to work that hard to turn the entire product around. Even if they had, Flickr [was] very techie hipster, many didn't use or like Facebook and considered it bland, boring, evil, poorly designed, etc., and were certainly not ready to fast follow it. Emphasis was put more on how things looked, and felt, rather than on metrics and on what worked.

But what finally killed their market leadership was not following the Great Mobile switch:

"Flickr was not empowered to build its own iOS app—or any other mobile app for that matter," laments one former Flickr executive. "You had this external team with strong opinions as to what the app should do."

And so, after a bit more score settling in the article, Gizmodo concludes:

Flickr's mobile and social failures are ultimately both symptoms of the same problem: a big company trying to reinvent itself by gobbling up smaller ones, and then wasting what it has. The story of Flickr is not that dissimilar to the story of Google's buyout of Dodgeball, or Aol's purchase of Brizzly. Beloved Internet services with dedicated communities, dashed upon the rocks of unwieldy companies overrun with vice presidents.

As a result, Flickr today is a very different site than it was five years ago. It's an Internet backwater. It's not socially appealing

I don't buy this, in this case I think its uber user grumps distorting the reality-field. I reckon there was actually a different story going on:

1. In 2005 Yahoo knew what Social was all about, and went out of their way to buy leading "Web 2.0 v.1" companies.

2. They tried to integrate all their assets to simplify the UE and impact. It worked, but pissed off the early power users, and that whinging tends to cloud the issue and generates a lot of "Evil Yahoo" negative press even today.

3. The reality is that Flickr was a Web 2.0 v1 creation and got outmanouvred by the v 2.0 startups built on their shoulders, in the darwinian stew of any developing technology. Yahoo actually could see this judging by their actions.

4. Most of the v 1.0 companies haven't made it through the cut, not just Flickr (in fact thay have done a darn sight better than most - or even all!) so it is arguable they would not have made the cut if they were still independent. And virtually no pre-smartphone dotcom/web 2.0/m-commerce business has survived the New Mobile 2.0 game. Just ask Nokia. It was hit with a classic generational shift in developing technologies, like the move from propellor to jet in aircraft.

5. Yahoo by then had far bigger problems, meaning management turmoil at the highest level, which - I know from my own experience - means decisions don't get made and Things Grind To a Halt (the Peanut Butter conspiracy).

6. Yet, despite all this, Flickr is still going strong, rumours of its death are somewhat exaggerrated. Its just no longer the 95% giant in a tiny grovy market, its just a major player in a far huger mass market.

A comeback doesn't seem likely, says Gizmodo, unless its spun out.

Flickr is still very valuable. It has a massive database of geotagged, Creative Commons- and Getty-licensed, subject-tagged photos. But sadly, Yahoo's steady march of incompetence doesn't bode well for making use of these valuable properties. If the Internet really were a series of tubes, Yahoo would be the leaking sewage pipe, covering everything it comes in contact with in watered-down shit.

Flickr's last best hope is that Yahoo realizes its value and decides to spin it off for a few bucks before both drop down into a final death spiral. But even if that happens, Flickr has a long road ahead of it to relevance. People don't tend to come back to homes they've already abandoned.

Now I really don't buy this one. Facebook's IPO is going to create a Social Frenzy, and anyone with the assets Flickr has, is going to be valued pretty highly. Perish the thought that those who want Yahoo to sell it off for "a few bucks" know it full well too, and want to do a Del.icio.us flip-play