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At Flickr, Fending Off Rumors and Facebook

Verne G. Kopytoff |The New York Times
Monday, 31 Jan 2011 | 7:39 AM ET

Speculation in technology circles that Yahoo might close or sell Flickr, its photo-sharing service, prompted an emphatic denial this month.

Michael Blann | Getty Images

“Is Yahoo committed to Flickr?” Blake Irving, Yahoo’s product chief, wrote in a message on Twitter. “Hell yes we are!”

The confusion over Flickr’s future was perhaps understandable. Yahoo had just recently disclosed plans to shut down or otherwise dispose of several other Web products, including the bookmarking service Delicious, and some users feared Flickr would be next.

A pioneer in combining photos with social networking features, Flickr is facing a stiff challenge from newer services. In addition to fighting rumors, it is having to work hard to keep its users returning as Facebook widens its lead as the popular destination for sharing party, vacation and family snapshots.

Although Flickr is well known and still widely used, its traffic is shrinking. Unique visitors to Flickr in the United States fell 16 percent, to 21.3 million, in December compared with a year earlier, according to comScore. Meanwhile, for that same time frame, use of Facebook’s photo features grew 92 percent, to 123.9 million users.

Flickr’s trajectory largely dovetails that of Yahoo, which is struggling to re-emerge from years of underperformance. Carol A. Bartz, the company’s chief executive, is leading a turnaround effort that includes jettisoning products that are not central to her strategy of emphasizing Yahoo’s strengths.

Other than the recent support on Twitter, Yahoo’s top executives have barely mentioned Flickr publicly for some time. Few top executives actually have a public Flickr account.

No one questions Flickr’s appeal to photographers who post, admire and comment on a wealth of artistic images, many of which are magazine quality. Where Flickr is faltering is with people who want to store and share more mundane snapshots.

Convenient for sharing with friends, Facebook offers free unlimited storage and an increasingly competitive product.

In September, Facebook started testing an upgrade that allows for larger, higher-resolution images, has the ability to “tag” or add keywords to photos in bulk, and adds a new photo viewer to better showcase images.

Facebook’s dominance in photos stems from its appeal to consumers on several fronts, according to Jordan Rohan, an analyst with Stifel, Nicolaus & Company. Visiting Facebook is a daily ritual for many people, but that simply is not the case with Flickr.

“The Internet is starting to rotate around the axis of Facebook — not everything, but everything social,” Mr. Rohan said. “Yahoo and Flickr don’t really have the gravitational pull that would make Flickr the axis that they once imagined.”

Matthew Rothenberg, who heads Flickr, said he did not worry about Facebook and its growing user base, but rather about the quality of Flickr’s service. The rest, he said, will take care of itself.

“To me it’s not a numbers game,” Mr. Rothenberg said. “I think we’re trying to build the best experience that we can and make sure our users are engaged and happy — and more and more of them will sign up.”

Flickr was founded in 2004 by Stewart Butterfield and his wife at the time, Caterina Fake. A year later, after the site gained a large following and ample excitement, they sold it to Yahoo for a reported $35 million.

Yahoo’s executives described Flickr as more than a photo site. With its social features, it embodied a philosophy that would influence Yahoo’s future direction. Silicon Valley insiders started referring to the “Flickrization of Yahoo.”

After a couple of years, Yahoo retired its older photo service, Yahoo Photos, and made Flickr its flagship photo site.

Behind the scenes, however, Yahoo failed to provide some resources needed during the first couple of years, said Mr. Butterfield, who left Yahoo in 2008 and has since founded a video game start-up. Decision-making slowed because of bureaucracy.

“We just missed some opportunities that we could have tried if we were independent and raised our own money,” Mr. Butterfield said. “Who knows what would have happened?”

Giving more visibility to photos of breaking news events — like riots in Paris or minor car crashes — was one idea that never got off the ground. International expansion could also have happened more quickly, Mr. Butterfield said.

Still, he gave Flickr qualified praise for what it has become. He continues to see the site as a leader among photo enthusiasts, even though he acknowledged that it would never challenge Facebook’s grip on mainstream users.

“There’s not another 100 million people who would use Flickr and be happy with it without a fundamental change to what it is and what it does,” Mr. Butterfield said.

Today, Flickr is home to around five billion photos and videos (it accepts video clips of up to 90 seconds). Roughly three million more are added daily.

Flickr’s free service lets users display 200 of their most recently uploaded photos. For more, users must pay $25 annually.

In addition to subscriptions, Flickr makes money from online advertising. Partnerships with the photo-printing service Snapfish and Getty Images, a photo agency that licenses work by Flickr’s users, also add revenue. Flickr is profitable, Mr. Rothenberg said, although he declined to provide specifics. In a sign of health, he said new-user registrations had picked up in recent months.

Flickr faces stiff competition on cellphones, where applications like Instagram, which offers retro-looking shareable photos, have quickly gained momentum.

But Mr. Rothenberg said Flickr did not need to own every cellphone app to benefit from them, since many different apps offer to let users send photos to Flickr.

“When something like Instagram comes along that’s fun and easy for people to take shots that look like they come from a toy camera — Instamatics — we are really grateful,” he said. “Out of the door, all of these things upload to Flickr.”

Among Mr. Rothenberg’s proudest achievements over the last year are a redesigned photo page that offers larger images and a system for users to log into Flickr with their Google and Facebook user names and passwords. More improvements are on the horizon, he said.

The goal, Mr. Rothenberg said, is to recall the experience of sharing photos before the digital age, when people would sit together on a couch, thumb through a photo album and tell stories.

“What we are trying to do at Flickr ultimately is to use all these new technologies to get back to that experience — to get back to that rich storytelling experience — and to do it in the only way it can be done, with the technologies of today,” he said.

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