Flickr’s Stewart Butterfield foresaw that people could communicate with photographs – and made a killing

STEWART BUTTERFIELD SHOWS me a picture taken at Barack Obama’s victory rally in Chicago. The president cuts a small figure in the corner of the shot, which is dominated by the scrum of jubilant supporters in front of him. “You’ve seen this picture before, right?” says Butterfield. “Now look closer.”
He zooms in on the crowd, and it becomes obvious why the founder of photo-sharing website Flickr is showing me this picture. Everyone in the crowd, without exception, is pointing some kind of image-capturing device at Obama. One man is holding a laptop above his head, carefully aiming it at his new president.

“People want to document news themselves these days. They’re tired of having stuff fed to them by the same old sources,” says Butterfield. “The age of participation is upon us.”

Flickr is a product of this age. Created in February 2004 around the same time as Facebook (Butterfield insists his baby came first), Flickr was to become
“the eyes of the world.” This idea cameinto its own seven months later, when images of the bombing of the Australian Embassy in Jakarta were posted and shared on Flickr before they appeared on CNN.

“Photography used to be about memory preservation. With Flickr, photography has become a form of communication,” says Butterfield.

Like so many inventions, Flickr was a bit of a fluke. Butterfield and wife-to-be Caterina Fake were designing a photo-sharing feature for an online game called Game Neverending. It occurred to them that the photo-sharing bit might be a better idea than the game itself (which, despite its name, no longer exists).

Flickr now pulls in 60 million shutterbugs every month and made Butterfield rich when he sold it to Yahoo! in 2005 for US$35 million. You wouldn’t know it to look at him. The 35-year-old Canadian is wearing faded jeans, a checked shirt (untucked) and an untidy beard. Very Silicon Valley. He could be a young Jimmy Wales, the founder of Wikipedia, or an older Mark Zuckerberg, who started Facebook.

Butterfield raised a few eyebrows when he quit Yahoo! last summer. Particularly as he did so via a bizarre resignation email in which he likened the company to a tin-smith firm. “I will be spending more time with my family, tending to my small but growing alpaca herd and, of course, getting back to working with tin, my first love,” he wrote to Yahoo! senior vice president Brad Garlinghouse.

He is horribly jetlagged, which adds to the scruffy-clever look. His speech is reduced to a whisper, and with some effort he croaks his story.

What was that resignation letter all about? Were you having a pop at your employer?
Not at all. My only motivation for writing that email was the thought that it might brighten up the day of some poor dude in HR, who probably has a really shit job. It wasn’t a commentary on the state of Yahoo! or anything like that. It was just meant to be funny.

Do you regret leaving Yahoo!?
No, but I do miss it. It’s a wonderful place to work. Ridiculous at times. A few months ago we were sent some finger rockets – the soft, foamy things with the elastic at the back. They were super popular. People started bringing safety goggles into work.

So the cliché that West Coast dotcoms are wacky geek hangouts rings true for Flickr?
I guess so. Two years ago we – excuse the “we,” but it still feels like I work there – convinced Yahoo! to let us leave their Sunnyvale headquarters, which is in a horrible business park 60 kilometers south of San Francisco – and a bitch of a commute. We moved downtown, near the Bay. The walls of the new place were knocked down and the cubicles removed. In no time it was filled with LEGO, foam weapons, nerf guns, an Xbox 360, a Nintendo Wii and, of course, the obligatory Guitar Hero. The walls were plastered with stuff people have printed out. Some of it was stupid internal memos, most of it amusing rants from customers. “Fuck you,” “You fucking assholes,” “You’re all Nazis.” Stuff like that.

Did you guys ever do any work?
It was a goofy office, sure. But crazy hard work. Flickr probably has the most talented people in software development, given that there are only 50 people in a team that serves 15,000 images every second. This compares to the 900 or so staff at Facebook. Our engineers and operators have to manage many petabytes of memory housed in four rooms filled to the ceiling with thousands of CPUs, servers and hard drives. When there is a problem, a bottleneck in the database or something, these guys take it very personally. It’s a very high-pressure environment.

Flickr is a nice idea, but does it make money?
I’m not allowed to give you the numbers, but Flickr is profitable.

But how?
It has 30,000 subscribers who pay for extra storage space and special features. It has a service that makes prints, photo books and DVDs. And it takes some advertising. We started out with contextual ads, but that didn’t work out. Next to a picture of someone’s father who had died of Alzheimer’s would be ads for cheap drugs. So we stopped running them. We toyed with the idea of allowing companies to place products in peoples’ pictures, but that hasn’t taken off yet. Flickr is of more value for the halo effect it has on the Yahoo! brand than as a money-making machine.

We’ve heard that you’re toying with the idea of creating a user-generated (sorry, “participatory”) bank. Given how unreliable Wikipedia can be, isn’t a bank that anyone can tamper with a very silly idea?
It wouldn’t be a wiki bank – it wouldn’t be open for anyone to change it then rob it. The framework would be set out by the administrators. Only parts of the service would be customized by the customers themselves. It’s a great time to revolutionize banking, just as low-cost carriers have revolutionized air travel. Everyone hates banks, just as everyone used to hate airlines. My bank would be like the start-up airlines that are free of the baggage of crusty, 25 year-old IT systems. I probably don’t have the patience to deal with the regulatory hurdles that come with banking, but I really like the idea. We’ll see …

Is the Internet really ours? Or is this an illusion created by clever people from the West Coast like you?
[Laughs]. I like this sort of question. Facebook, MySpace, Flickr and YouTube. Are they public or private spaces? Private, I suppose, because they’re owned by private companies. But the Internet, technically, isn’t owned by anyone. There isn’t a central controlling authority that dictates what you can and cannot do. But at the same time the Internet has a physical manifestation. There are undersea cables connecting different countries. Even if you’re a Chinese company, and you put servers in Korea to publish things that the Chinese government doesn’t want you to, the powers that be can still control what people access.

The Internet throws up all sorts of jurisdictional conflicts. In some US states online gambling is illegal. So a few entrepreneurs thought, “Okay, we’ll go to the Cayman Islands and set up there.” The US government couldn’t do much about it directly. But they could go to Visa and MasterCard and say if you process payments from online casinos, we’ll fine you a million dollars for each payment you process.

Ultimately the Internet isn’t owned by anyone. It’s owned by everyone. It’s certainly not controlled by me or Mark Zuckerberg, as much as we might like to think otherwise.

Are social networking sites making people less sociable in the real world? Do people bother meeting up after they’ve been poking each other all day on Facebook?
Some people do withdraw into technology. But I would argue that more people go online to make connections than hide from the world. Long gone are the days when online social media was associated with creepy fat men hunched over their computers prowling in chat rooms late at night.

Is there a social networking fraternity that hangs out and shares ideas? Or do you jealously guard your projects?
[Laughs]. Well, I’ve met everyone. I see Jimmy [Wales] more often than anyone else. (That guy seems to be everywhere!) But there’s no secret society. The Web 2.0 people end up going to the same conferences and parties, but that’s not necessarily a good thing. You end up with inbred ideas. But an idea itself doesn’t have a lot of value. I get thousands of emails from people who tell me that they have an idea for blah blah blah. “I have an idea, everyone give me 10 million dollars!” If you don’t have the talent to pull it off, an idea is worthless. It’s all in the execution.

Is there a connection between the point at which social networking sites start making money and losing users?
It’s too early to say. There hasn’t been a mass exodus from any of the big social sites yet. But the only one that has made big money to date is MySpace. I don’t like MySpace, but you can’t deny that it has been successful. No one outside of Facebook knows if Facebook is profitable yet. It might still be losing money. YouTube doesn’t disclose figures either, but everyone knows it’s losing a lot of money.

Social networking sites are here today gone tomorrow. How will Flickr stand the test of time?
If the people managing it do a bad job then it will fail. But Flickr is still growing extremely quickly. It’s hard to know what will happen 50 years from now, but then it’s hard to know what will happen five years from now. Social networks are still very much a mystery.