The recent buzz has been all about how flickr was purchased by Yahoo!. And as expected, all the talk was about what this means for flickr, what changes would be coming, and possibly how it would all go to hell in a handbasket. It's fun stuff. But it also ignores what I think is the real story. The real story is that the business model was crap. The model depended on revenue from paying users, and from pageviews (ie: Google Adsense textads)from non-paying users. There had been some speculation on whether this was a viable model or not, especially considering the escalating demand on the servers and the bandwith. In Caterina's post on the sale, she mentions very specifically that funding discussions came up, and that not having to worry about finances makes them happy. Which is another way of saying that in order to grow they needed money from somebody else. Money that current revenue was not producing enough of. Which I infer to mean that revenue was simply not enough. Flickr is populor for a reason, and I've seen loads of people go pro overnight. I would have gone pro if the prices were higher, and I think others would have too. If any service could make this model really work well, they could. They kept the focus on this being a business. But in the end, the model wasn't good enough, and they did the smart thing ala bluemountaincards.com, and sold when the going was good. So what does this mean? Besides the fact that this is still not 1999, and popularity and buzz are still not enough to keep your company solvent? It means that fotolog.net is really behind the 8-ball. They've got to introduce some features to attract new paying users, and then they've got to shop themselves around to someone who can provide the financing and the steady business sense to keep them a leader in the field.