Flickr Founders Flee From Yahoo: A Lesson for Future Social Media Acquisitions?

Posted by John Blossom.

Public Categorized as Public.

Tagged with caterina fake, del.icio.us, digg, flickr, google, linkedin, myspace, stewart butterfield and yahoo.

You would need a good-sized broom to sweep your way through all of the posts being filed about the exit of Flickr co-founders Caterina Fake and Stewart Butterfield from Yahoo, a departure explained in part by a memo from Butterfield posted at ValleyWag.

Butterfield's tongue-in-cheek memo likens his departure to someone who started his career years ago in a tin foundry that over the years became a forgotten division in a huge conglomerate. Butterfield's point is well-taken. The successes of Flickr as a product after the Yahoo acquisition have very little to do with the greater Yahoo corporation and everything to do with the Flickr staff being focused like a laser on making their product fantastic. Marshall Kirkpatrick at Read/Write Web notes that the Flickr team's attention to customer service ensured that people felt lots of warm fuzzies when the started using the site and made it a point to keep their Nordstrom-like attention to customer excellence rolling along in spite of years of corporate nonsense hovering over their heads after the acquisition.

With Yahoo's del.icio.us social bookmarking Web site only recently getting a light makeover and the slow but steady decline of Fox Interactive Media's MySpace portal - not to mention the languishing of Blogger.com for years before Google began to give it some life - one wonders whether most traditional media businesses really want to know what social media is all about. MySpace is dying a slow but steady death at the hands of major-league spammers and was always oriented more towards tartish relationships rather than the "this is really me" personas found on independent sites like Facebook. At the same time with the recent injection of $56 billion in new financing for the LinkedIn social networking site - believed to put LinkedIn's market valuation in the neighborhood of $1 billion - there seems to be no lack of funds for well-managed social media plays to keep themselves growing as independent properties indefinitely.

As I mentioned in ContentBlogger last week I do think that there's a future for Yahoo as a destination portal that aggregates a lot of good content with some of its own improving native social media features. The loss of folks like Butterfield and Fake, as regrettable as it may be, is not likely to have much of an impact on Yahoo's primary focus on traditional media and brand advertising. In a portal where you would be hard-pressed to find the Flickr brand in any prominent role from the home page of Yahoo - Flickr's 25 million-plus monthly visitors merit only an alphabetical mention in the long, long list of "More Yahoo! Services" - how much impact could they have been making on the whole of Yahoo in the first place? But that in and of itself should set off a fairly large warning bell for people looking to make major social media content acquisitions.

We're still likely to see major acquisitions of social media site - Digg's rumored courtship with Google is the latest buzz - and some actually turn out pretty well (the wiki service JotSpot is probably much better off now as Google Sites). It's equally likely, though, that investors in major social media plays will be patient and recognize that the monetization of social media is about as far along as Google's was prior to their learning how to monetize search through advertising. I think that it's also likely that many independent sites such as Craigslist , content to be doing what they do quite well, will continue comfortably and indefinitely as independent publishers, seeing no personal need for the glory and the Gulfstream/Boeing/NASA rides that attract some other people to big media dollars at the expense of the people who have helped them to make their social media properties a success.

In other words, perhaps it's okay that social media and traditional media get along sometimes about as well as oil and vinegar in a salad dressing shaker - complementing one another but never being mistaken for one another. Since the conversational marketing enabled by social media is in many ways fundamentally different from the more forced dictations of traditional media perhaps it's best that major media players don't make a mess of what they really don't understand as much as possible. This is not to say that there aren't some great matchups of traditional and social meda when you get down into niche and enthusiast markets and communities, but the "big play" for social media generally doesn't play out at all the way that the braces-and-snappy-tie set would have it. Sorry, folks, perhaps there are some better tin foundries out there for you to play with.

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