Profile... Flickr founder wants to be the eyes of the world

Stewart Butterfield is jetlagged. His face is puffy and pale, his voice reduced to a rasping whisper. Which is a shame, given how much the founder of photo-sharing website Flickr wants to talk about media’s newest frontier: social networking.

The 35-year-old Canadian-born entrepreneur could not look more the Silicon Valley type if he tried. Wearing scruffy jeans with a shirt and sporting a beard, he looks like a younger version of Jimmy Wales, the Wikipedia founder. Or an older version of Mark Zuckerberg, the Facebook founder. With some effort, he croaks his story.

Flickr started in 2004, about the same time as Facebook. Its creation was something of an accident. Butterfield and co-founder (and wife-to-be) Caterina Fake were programming tools for a web-based game. The game needed a photo-sharing feature, and it dawned on them that the photo-sharing feature might be a better idea than the game itself.

Butterfield and Fake were proved right to the tune of US$30 million, the sum (it is believed, but Butterfield won’t confirm it) that Yahoo paid for Flickr when it acquired the company in 2005.

Like Facebook founder Mark Zuckerberg, who wants to be “a cartographer of human connections”, Butterfield has a grand sociological ambition behind his creation. “We want to be the eyes of the world,” he says, referring to pictures taken of bombings of the Australian embassy in Jakarta in September 2004 that appeared on Flickr before CNN. Butterfield also wants to change the way people use pictures. “Photography used to be about memory preservation,” he says. “With Flickr, photography is used to connect and communicate.”

Which is all well and good. But the big question, from a media perspective, is why Yahoo would pay millions for a website that wasn’t making any money. Indeed, the same argument could be made of Google when it bought YouTube and News Corp when it bought Myspace.

Flickr claims to host more than three billion images, serving one million photos every minute, thanks to thousands of hard drives and servers piled high in four enormous rooms in its office in San Francisco. The site has 60 million unique users per month, and around 30,000 subscribers who pay for extra storage space and a ‘pro’ service that has special tools to organise photos and videos. The site also offers a service to make prints, photobooks and DVDs, and is now available in eight languages, including Chinese and Korean.

Flickr wasn’t profitable at first, but it is now, says Butterfield, without giving figures. As well as paid subscribers, the site takes some display advertising. “We started out with contextual ads. But we ran into problems,” he says. “Next to a picture of someone’s father who died of Alzheimer’s would be ads for cheap drugs. This sort of advertising was too risky for us.”

There has been talk of brand owners placing products within Flickr photos, although Butterfield says it is too early to be thinking about product placement as a viable revenue stream.

“Flickr does make money for Yahoo, but more from the halo effect of the Flickr brand than hard dollars. No one other than MySpace has made money on a big scale yet.” And no one outside of Facebook knows if Facebook is profitable yet, he adds. “It could still be losing money. I don’t really like MySpace, and Facebook has gained a lot of ground, but there’s no doubting that MySpace has been successful. YouTube doesn’t disclose numbers, but everyone knows that it’s losing a lot of money. There are all sorts of annoying ads on YouTube these days, and maybe that has started to diminish its popularity.”

So does he think there’s a connection between the point at which a social networking site starts making money and the point at which it starts losing users? “It’s too early to say, but there has yet to be a mass exodus of users from social networking sites after they’ve been commercialised or bought over,” says Butterfield.

“When Yahoo bought Flickr, there was an uproar from Flickr users. But that’s a natural reaction. They felt protective of something that is essentially theirs. That’s the nature of participatory media.”

One remarkable thing about Flickr, Butterfield points out, is that it has grown into a global social phenomenon with very little money to promote it (just US$300 has been spent on some Google AdWords since launch). That’s the same as Google, he says, which has spent more on distribution than it has on advertising. “Google has only spent money on advertising in markets where it is weak, such as Korea or Japan, or to promote a new product, such as the Google Phone. But it pays US$1 billion so that it is the default search engine on a brand of computer. Distribution is the new advertising.”

So is there something he could be telling big advertisers like Procter & Gamble and Coca-Cola? “Even though it costs quite a lot to produce Coke, it costs even more to store it, distribute it and sell it. Flickr can put up a website for fractions of a penny. When you’re selling real, physical stuff, it’s a different dynamic. You need advertising more.” While Flickr is still growing quickly it is quite long in the tooth for a social network. It may host three billion pictures, but Facebook hosts 10 billion. Could users leave Flickr and put all their photos on Facebook instead?

“There is a lot of pride at stake,” says Butterfield, a little wearily. “Flickr has a much smaller team than Facebook. We have 50 people. They have around 900. It would be nice to claim that Flickr was future-proof, but it’s hard to tell what will happen 50 years from now. In this space, it is hard to tell what will happen five years from now. If the people running Flickr do a bad job, it will fail. It’s as simple as that.”

Stewart Butterfield’s CV

2005 General manager, Flickr
2002 President and co-founder, Ludicorp Research and Development (Flickr)
2000 Managing director, Gradfinder.com
1999 Director, Design Group
1996 Software and internet product design consultant, Sole Proprietorship