Stewart Butterfield and Caterina Fake — two of the poster kids for the internet's social-networking revolution — met, appropriately enough, on-line. He got hooked on Fake's blog, and soon after they'd met face-to-face in San Francisco, she moved north to Vancouver. That's where they started Ludicorp, a small company intent on developing a Web-based social game called Game Neverending.
It turned out the database code they'd created could be put to a far more lucrative use. They ditched the game and started building Flickr, a photo-sharing site that allows people to post, store and sort their pictures on-line.
By March, 2005, a year after its launch, Flickr had 250,000 subscribers. Then Yahoo came calling. It was trying to get in on Web 2.0, the new landscape of blogs and wikis (collaborative sites that allow users to add and edit content) that is re-energizing the internet economy. Flickr was one of just a few brands that could give Yahoo instant cred.
The Flickr team won't confirm the figure, but Yahoo reportedly offered them $27-million in cash and stock for the site, plus high-level jobs at Yahoo HQ in Sunnyvale, California.
Reinventing the Web is hard work—even if users do much of that work themselves. "I had imagined falling into a nice, warm bed of infrastructure, and everything being taken care of for us," says 33-year-old Butterfield, who signed on as Yahoo's director of product management. "But I clock the same 80-hour week I did before the acquisition."
Thanks to Yahoo's traffic, Flickr membership has quadrupled to
2.5 million, and the site has emerged as the linchpin of its new owner's social-networking strategy—that is, to reposition Yahoo as a venue for people to connect and share experiences, rather than simply as a place they go to search and shop.
Because of that shift, Yahoo is closing in on Google, the do-everything juggernaut a few kilometres down the Valley. Which raises the question: Given Flickr's strategic significance, did Butterfield and Fake sell out too soon?
If they did, they don't seem to be regretting it. Money is clearly not this couple's primary motivation. Instead of blowing their cash on Porsches or a sprawling manse, they rent a modest house in San Francisco's still-gentrifying Mission district. "We have a Prius for the fuel economy," he says. "And we share it."
— James Glave
