March 21, 2005

which would you rather own, flickr or snapfish?

Yahoo bought Flickr. HP bought Snapfish. Who made the better strategic play?

Flickr has around 300,000 registered users, many of whom are passionately loyal to the service. Flickr's blend of social networking, folksonomy tagging, open APIs, and freewheeling geek culture style make it a poster child for Web 2.0. And of course its buzz factor is to die for. Yahoo will give Flickr the resources it needs to scale up, and Flickr brings Yahoo a blast of cool that has been, um, somewhat lacking in recent years. The Ludicorp team is hyper-creative, and could do some widespread damage if partnered up with some of Yahoo's august community building talent. Oh hey, maybe GNE will even finally get finished ;-) If you believe in the potential of social media, this feels like a good play for Yahoo.

Snapfish claims 13 million registered users, and has a well-established but more traditional photo-oriented business model. Straightforward photo sharing, film processing, photo printing, and merchandising are the main events here. Snapfish is an online digital photography service for a mass market audience that's still living in a Web 1.0 world. Assuming the Snapfish culture doesn't get suffocated by HP's conservative Fortune 50 style, this looks like a good way for HP to build a true service-oriented consumer business to complement its dominant consumer hardware and supplies machine.

Bottom line, I think both deals are interesting and promising for different reasons. Flickr is a lovely shiny new thing pointing the way to the future, and it has the considerable energy of the online creative class behind it. The Snapfish acquisition is way more boring, and I suspect it has more execution risk, but I think it also has greater potential to be a game-changing play for HP than Flickr does for Yahoo. It will be interesting to see where these two companies are in a year.

[Disclaimer: Just my own personal opinions here, folks, not my employer's.]

Posted by Gene at March 21, 2005 04:09 PM | TrackBack

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