Fred Wilson is Wrong About Flickr

A VC: Point Solutions vs End to End Solutions Venture Capitalist Fred Wilson is out with a post on his way to Web 2.0 (ahhh, to be able to be at Web 2.0 — a boy can only dream) and writes about Flickr. According to Fred:

“Flickr hasn’t improved in any measurable way now that it is part of Yahoo!. In fact, I am finding it to be buggier and flakier than usual lately. Probably due to scaling issues, but being part of Yahoo! doesn’t seem to be a magic bullet in that regard.”

and

“I doubt that Yahoo is going to give me anything more than what I already get from Flickr.”

First off, and I’m not claiming Yahoo! had anything to do with it, but perhaps the most significant improvement to Flickr to date and something that has HUGE implications for down the road has been rolled out since the Yahoo! acquisition. I’m talking about interestingness. Perhaps some Yahoo! resources played a role in this, perhaps not — but it still came to market post acquisition.

Interestingness, which is Flickr’s image rank technology, is the single best algorithm at present for ranking photos. Much of its strength lays in the fact that not only is it a well written algorithm from a coding standpoint, but it has the added benefit of human input (a huge part of the value of Flickr’s social network to Yahoo!). I’ve written about this many times in the past. When you compare the image search results from Flickr ranked by interestingness vs. Yahoo! or Google or Ask Jeeves or anyone else who is doing image search without the human integration the differences are staggering.

The vast superiority of Flickr’s searches may not be evident to everyone yet today. And although I’m truly surprised Yahoo! has not integrated the Flickr algorithm into Yahoo! image search yet, you can bet your bottom dollar that they will and when they do they will have a vastly superior image search product compared to Google.

Perhaps Google will be able to play catch up here later, perhaps not, but Yahoo!’s image search won’t just be a little bit better, it will be a whole lot better. Image Search is 80% about first page results and 18% about the next four pages of results.

The problem with Flickr today is that they simply need more members, more photos and more tags. Flickr is great at showing you the best photos of dogs or cats or flowers or San Francisco. But they are not the best at showing you the best photos, or any photo, of say some obscure river in Africa. As Flickr grows though, their digital library will only get larger and larger. It’s integration into Yahoo! image search will only make it better and better the larger Flickr gets.

Do not underestimate the value of the human element in Flickr’s image rank algorithm to Yahoo!. Yes image search is not the giant that web search is but it’s a pretty big market nonetheless and will get even bigger as smart companies like Flickr/Yahoo! come up with new ways to monetize image search which I’m not going to get into right now.

These new ways to monetize Flickr though will both benefit current members and draw many new top photographers to Flickr as well.

There are many other ways that Yahoo! can squeeze value from Flickr and why the leverage of Yahoo! makes such great sense as well. I’ve written about some of these in the past. Just a few: Outdoor and indoor plasma slide shows/advertising. Integrating Flickr images into Yahoo! Local Search. In fact, really integrating Flickr photos into any kind of directory service. Shots of company headquarters in Yahoo! Finance, for instance, or integration with Yahoo! maps combined with geotagging technologies as they develop. Rich full home media based art and slide shows will also be a strong market as the plasma becomes the new canvas of the modern home.

Every day millions of images are captured digitally from digital SLRs to camera phones. This will only grow. Flickr will grow. It will become more complete. Yahoo! will be able to help spend marketing dollars to grow Flickr. Being able to effectively catalog and organize the top 5% of images will be very significant in a whole host of ways for any media company in the future — and that is exactly what Yahoo! is — as John Battelle said in an interview that I blogged about earlier today, a media company. But with Flickr today Yahoo! get’s an army of 1,000 volunteers armed with digital cameras and some of them are pretty darn good — in fact the best out there today.

While other companies can pursue similar ways of ranking, organizing, cataloging and tracking, Flickr has a big head start at this point. The backing of both engineering talent and finances from Yahoo! as a parent company will play a role in expediting the growth of the company, its community and their technology. Cross marketing from Yahoo!’s other properties will drive traffic and users to Flickr. The integration of the Yahoo! ID and the Flickr ID was merely a first step in this.

It is still really really early on for Flickr at Yahoo! And perhaps the question Fred should be asking is not what Yahoo! will do for Flickr (the answer here is marketing, money, scalability and engineering talent just to name a few) but what will Flickr do in the end for Yahoo! ,

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