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Stewart and Caterina in Newsweek

Now the Flickrites are everywhere. From the latest issue of Newsweek, "Hi-Tech's New Day":


The new economics of starting a Web business may even be changing the entrepreneur's celebrated goal: striking it rich with an IPO. With the market for new stocks still flat, many entrepreneurs just want to get scooped up by one of the few Internet giants like Yahoo, Google or media mogul Barry Diller's AIC/InterActiveCorp. In this respect and many others, the Vancouver-based Flickr is typical of the dot-com revival. It's yet another photo-sharing site, but with a few nifty innovations: users can tag their photos with keywords, adding them to groups of similar shots from other users, and can append comments to any picture. More than a year after married founders Stewart Butterfield and Caterina Fake started the company, it has drawn more than a million users -- without promotional expenses, of course.

Earlier this year, the couple was close to raising money from top venture-capital firm Accel, which would have put their company on a traditional track and prepared them, one day, to go public. Instead, this month they sold to Yahoo for a rumored $35 million. Integrated into Yahoo, they won't have to build human-resource, finance or legal teams. "We'll be taken care of and can concentrate on what we like doing best, which is building the product," Butterfield says. And if there's another tech swoon, or if another set of hungry entrepreneurs cook up an even better photo-sharing mousetrap, Flickr will have Yahoo's might to protect itself.

This is a great answer to the "why sell now?" question.

My hope and belief is that, two or three years from now, when we look back on the Flickr acquisition by Yahoo, it will be seen in a new and even more significant light. Yahoo isn't just getting a photo sharing community, or the technology that powers it -- they're getting the people who arguably know more right now than anyone in the world about creating Web-based ecosystems.


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