I’m late to the party, but I just started messing around with digital photo sharing site, Flickr.com, a month ago. Shame on me, I know! For those of us isolated in China who missed Flickr here is an overview of the company:

Launched in 2002, Flickr has grown along with digital camera sales and has helped popularize tagging. Named “Breakout of the Year” at the 2005 Webby Awards, the community now numbers 37 million photos and 1.2 million members, many of whom are considered to be among the web’s most creative image makers.

In March 2005, Yahoo purchased Flickr for US$25 – 30 million. Obviously, this is old news, so why dredge it up from the depths of Internet past? Good question!

The answer can be summed up in one word: DEMAND

Until very recently, there was no demand for Flickr in China, however, Bokee’s US$10 million funding changed all of that; and now, blogging, Web2.0, RSS, tagging, Wiki, etc are terms even Central Party officials recognize. Soon to follow will be hundreds of ventures claiming to be Flickr with Chinese characteristics – I already have a dedicated Flickr Thunderbird folder.

In anticipation for this event I thought it worthwhile to chat with some of Silicon Valley’s top venture capital funds and bloggers and ask them to share with us the reason Yahoo purchased Flickr. Thanks to everyone who replied.

Brad Feld from Mobius Ventures:

Why did Yahoo purchase Flickr?

1. The technology – while not hugely complex – was implemented really well and had a lot of very happy users.
2. The user adoption was incredible and growing very quickly.
3. The price was relatively inexpensive (around $25m – $30m) for something Yahoo felt it needed.

Basically, it is all about the community, technology player a very minor role, yes?

Yup – there are loads of [companies developing similar photo sharing technology] out there. The thing Flickr did was create a huge and rapidly growing community

Rob Scobles, Technical Evangelist, Microsoft

Why did Yahoo purchase Flickr?

For me, Flickr’s interface (tagging) and RSS integration were way ahead of anyone else, but really it was the community that made it impressive. Community is important. It’s why eBay is a huge business today

Takeaway: Scale that community, or bail!