Yahoo, which bought the popular photo management and sharing platform in 2005 for $25 million, announced that it would cut 15 percent of its workforce (equivalent to 1,700 jobs) in non-essential businesses due to shrinking profitability. Flickr is one of those non-essential businesses, despite having exceeded 112 million members in 2015.
“Yahoo cannot win the hearts and minds of users and advertisers with a complicated portfolio of products and assets, especially if some no longer meet our aggressive growth goals or distract from growth products,” Yahoo CEO Marissa Mayer said in the company’s Q4 earnings report, which revealed a staggering $4.43 billion dollar loss in the quarter ending on December 31, 2015.
While floundering products such as Yahoo Games are expected to be shutdown completely, Flickr will remain afloat, but with reduced resources and minimal overhead. There is also the possibility, as reported by PetaPixel, that Yahoo is shopping Flickr along with its other core Internet businesses.
Meanwhile, Mayer points to a focus on higher growth products, particularly in the realm of mobile and video.
Fast Company reports:
“Mayer outlined a strategy for a ‘simpler’ Yahoo that will be significantly smaller and less expensive to operate. It will focus on fewer products, including search, mail, and Tumblr; close some underperforming old businesses, such as Yahoo Games and Yahoo Smart TV; and merge some of its digital ‘magazines’ to emerge with a more streamlined content portfolio that emphasizes News, Finance, Sports, and Lifestyle. Additionally, some surviving products, such as Flickr and Groups, will be run in a fashion that requires less investment.”
The Wall Street Journal adds that Yahoo is seeking to maximize its stake in Alibaba, the Chinese e-commerce giant.
We’re interested to see what the future holds for Flickr, and hope that it can stay off of Yahoo’s chopping block. If you’re interested in the dynamics of acquisitions, this article by TechCrunch is a great read on what’s at stake when a behemoth like Yahoo comes knocking on the door of an exploding startup like Flickr circa-2005.
