Before Mark Zuckerberg started the question-and-answer session at today’s Facebook shareholder meeting, he noted that many of the pre-submitted questions focused on the performance of Facebook’s stock since IPO. It’s a familiar question, and he offered comments similar to ones that he’s made before — including at TechCrunch’s Disrupt conference last fall.

Zuckerberg acknowledged that many shareholders aren’t happy with the stock’s performance, and he said Facebook needs to do more than achieve its general mission of making the world more open and connected — it also needs “to be a great financial return for all of our shareholders.”

“We’re disappointed with the performance of the stock over the past year,” he said. “The real question is: What are we going to do about it?”

Zuckerberg didn’t get too specific in his response, but he said that the company has always taken “a long-term view.” He noted that it took Facebook nine years to get to the point that it’s at today, and he said the company will “stay focused” on things like improving the product, growing revenue, and adding more apps to the platform, rather than the stock price per se. As it does so, he said he expects there “to be fluctuations in how the public thinks that we’re doing.”

Judging from the questions that followed, shareholders weren’t entirely happy with that response. And while it’s easy to poke fun at the cantankerousness or apparent naivete of many of the comments and questions, it was a reminder of the (perhaps obvious) point that there are many regular people who bought Facebook and lost money as a result.

Zuckerberg’s answers to their complaints were mainly a variation on his initial comments, but he did give an interesting answer at the end, when someone asked how much time he spends paying attention to the business.

“I spend most of my time reviewing the product and on the things that our users touch,” he said. However, he noted that “users” include a number of groups, including consumers, developers, and advertisers. So he added that it’s safe to assume that he has spent a meaningful amount of time reviewing Facebook’s ad products: “I’m very well-versed with our ad business.”

Article courtesy of TechCrunch

Editor’s note: Ted Summe is the founder of Discoverly, an enterprise tool that puts social data to work. Earlier in his career, he worked with enterprise software companies at Morgan Stanley and bought them at Salesforce.com. You can follow him on Twitter @tsumme.

Having slung enterprise software companies at Morgan Stanley and bought them at Salesforce.com, I’ve got some perspective on what it takes to sell an enterprise software company. It’s no secret that before you even get started, there are a number of things to consider. Who will fund your mission? Who will join your tribe? And how will you price and distribute your product?

While these are all important factors to examine early on, there might come a time when you will start to plan for your exit. When the time comes, you’ll need to take into consideration your location,  stack, uptime, how lean your team is and, of course, the legal stuff. Of course there’s nuance to all these considerations, but they’re the main themes to consider when positioning yourself for acquisition success in the future. For those building toward a thriving standalone business, this information can be a helpful part of your contingency plan.

Location Matters

Surprisingly, location might be the single most important factor in engineering acquisition success. The fact is most acquisitions fail due to poor integration and location can be a big part of that. If you’re acquired as a small company or acqui-hired, you’ll likely be expected to relocate. But if you’re acquired as a larger, more established company, location can become more of a challenge.  For the integration to be successful, leadership from the buyer is going to have to make frequent trips to your office location. That means you want to be headquartered in a city that is either convenient, strategic, or particularly desirable – executives will volunteer for the work trip to Paris but not to Topeka.

Stack

This is pretty simple. You want to build your software in the same language as your potential buyer(s). If a company’s software is written in Java, and yours is written .NET, you’re not appealing because they don’t want to support another language and don’t have the engineering talent to do so.  You might as well move to Topeka.

Uptime

One of the major differences between consumer M&A and enterprise M&A is driven by the SLA (Service License Agreement). SaaS enterprise software companies make uptime commitments to their customers, and if they fail to maintain them, they incur significant costs.

Big companies already have fat; they don’t want to pack yours on, too.

When YouTube went down occasionally after the Google acquisition, users would say “bummer” and come back later. When MSFT sells Yammer to its customers and it goes down, customers say “WTF, I’m running my business on this and you’re screwing me.” As a result, the buyer will need to invest in your product to meet the SLA requirements you’re contractually obligated to fulfill. The amount they have to invest can vary.

If your technology is reasonably hardened, the buyer will likely maintain your stack and invest to get it up to their standards. This investment increases their calculation of the cost of the acquisition and thus reduces the amount they’re willing to pay.

Say your technology is young and your codebase is relatively light. The buyer will possibly just rewrite your code on their stack to reduce the uptime risk. This costs money and slows their time to market and thus reduces the amount they’re willing to pay.

The worst case is that your codebase is heavy but not hardened because then the buyer will have to invest significantly to either rewrite or harden. This will make your company a risky acquisition and thus significantly reduces the amount they’re willing to pay.

Strong And Lean Team

Whether its an acqui-hire or a straight acquisition, the composition of your team is important. Startups are able to recruit talented, driven employees, and buyers love to pay them extra money to stay around after the deal. But only if the team is strong and lean. Big companies already have fat; they don’t want to pack yours on, too.

Don’t Forget The Legal Stuff

Big companies aren’t nimble like startups, and that is in some part because they have deep pockets weighing them down. Because people can come after those deep pockets, the big companies have to be bogged down with worries about IP and whether other companies could have patent-infringement claims against them, now or in the future. Many startups overlook this piece, since few companies will sue a startup based on IP, but those liabilities will become real upon acquisition. As such, monitor your IP exposure as you grow.

Article courtesy of TechCrunch

Facebook is wrapping up a press session at its Menlo Park headquarters where it talked about the progress that it’s making with advertisers and announced it will be eliminating and consolidating a number of ad units.

The big vision, according to Product Manager Fidji Simo, is to simplify the general process of running ads on Facebook. She said that when Facebook looked at its 27 different ad products, it found that “every single product is really good on its own,” but “the whole is less than the sum of its parts.” The process is too complicated right now, she said (which could potentially scare businesses away or mean that they run less effective campaigns). Ultimately, advertisers should just tell Facebook “who you are, what your message is, and what your objective is,” then they should be able to run the kind of campaign that works for them without any “guesswork.”

Somewhat confusingly, given that vision, it sounds like Facebook actually isn’t announcing changes to the ad-buying workflow. When one of the reporters asked about this, Facebook’s Andrew Bosworth said that the bidding process isn’t changing at all. Simo said the announced changes fall into three different categories — streamlining the number of ad formats, “really bringing the best of Sponsored Stories to all ads,” and increasing the consistency in how ads are displayed. Basically, it sounds like Facebook is eliminating and consolidating of a number of different ad products. Simo argued that this gets Facebook closer to its vision “by reducing the possibility of choosing the wrong thing.”

For example, Facebook is eliminating the Questions product and instead adding the ability to ask Questions within a regular Page Post. It’s also eliminating the product for online offers, because advertisers are just promote a link that points users to an offers on their website. (It’s keeping the product to promote in-store offers.) And it’s also eliminating Sponsored Story units and instead integrating Sponsored Story into a number of other ad units — instead of allowing advertisers to buy a Sponsored Story, Facebook will automatically add “social context” to an ad whenever such context exists. (You can see an example of an ad with social context below.)

Most of these changes won’t happen until the third or fourth quarter of this year, Simo said, although some of them may come sooner.

There are more details in a just-published Facebook blog post. The company says, “In the next six months, we plan to streamline the number of ad units from 27 to fewer than half of that while mapping all of our ads to the business objectives marketers care about — be it in-store sales, online conversions, app installs, etc.”

Article courtesy of TechCrunch

Some Facebook users are seeing sponsored research polls about the company’s most recent Facebook Home campaign.

The poll asks users which companies they most associate with “putting your friends at the heart of your phone” and provides related companies and social networks. The marketing campaign included news feed advertisements and the company’s first produced television commercials.

In response to the poor reception of Home including AT&T’s discontinuation of Home’s flagship phone, the HTC First, Facebook looks interested in learning more about how these ads can be improved for future campaigns. The company has also recently updated the application for better stability and make improvements to the experience.

Earlier this week, Facebook reminded users that they could turn off Facebook Home and use their phone normally as they see fit. The company seems to be making a continued effort in to educate their users on the product and how it can be used. By researching through polls and learning more about how users understand it, Facebook can try to correct on oversights for future campaigns of Home.

Article courtesy of Inside Facebook

Thalmic Labs, the Waterloo-based startup working on an all new form of user input for computing devices with the MYO amrband, today announced the close of its $14.5 million Series A funding round, led by Spark Capital and Intel Capital. The round boasts a lot of others besides, including Formation 8, First Round Capital, FundersClub, and individual investors like Paul Graham, Garry Tan, Marc Benioff and more, and will be used to help spur product development of the MYO, and of other forthcoming Thalmic technologies.

MYO, for those who aren’t familiar, is an armband that measures electrical activity to detect fine movement from a wearer’s arm, making for sensitive, accurate gesture-based control of computing devices, including desktop computers, smartphones and tablet, as well as a range of other possible devices. Thalmic is co-founded by three graduates of the University of Waterloo’s mechatronics (yes, that’s a real word) engineering program, including Matthew Bailey, Aaron Grant and Stephen Lake. I spoke with Lake about his company’s funding, their plans fo the money and the challenges yet to come for MYO, which is still in the pre-order stage, with a launch intended for late 2013.

“[The funding is] going towards further developing MYO and getting to full production with it,” he said. “We’ve been growing the team pretty steadily over the past six months or so, and we’ll definitely continue to do that as we find the right people. So there’s the team, R&D, and production of the product as the three main areas we’re focusing on with this round.”

MYO has had little trouble attracting the attention and imagination of tech enthusiasts. So far, it has racked up well over 30,000 pre-orders, which at $149 per unit, represents total potential sales of $4.5 million. The startup secured a $1 million seed round back in 2012, and is both a University of Waterloo VeloCity and Y Combinator alumnus, and Lake says that despite what he’d been told by friends and advisors before seeking out this new funding, finding interested investors willing to take on a hardware portfolio country wasn’t hard.

“We heard from everyone going in that no one will touch hardware, that it’s not sexy, investors want social/local/mobile software and that’s the focus right now,” Lake explained. “But I think that a lot of it is that it’s the right time for it. There have been several before us, higher profile hardware startups that have done very well, through Kickstarter campaigns or pre-order… I think a lot of them saw that as a sort of a proof point that all of a sudden there are successful hardware startups out there.”

Lake also credited Paul Graham for “beating the drum” around hardware being the next big thing for investors, and about changes in the production process that have resulted in time-to-market and investment required becoming drastically reduced vs. even just ten years ago. In the end, he said investors were eager to come on board, given the company’s early success with pre-orders, and that Thalmic definitely didn’t lack for choice when putting together this round.

MYO has already received a lot of strong support from the community, and videos depicting the armband in action have garnered plenty of views, but strong support and plenty of advance hype doesn’t guarantee success, especially in an area as untested as new interaction paradigms. I asked Lake what he thought about challenges encountered by devices in the same space, like the Leap Motion controller, which delayed its target launch date after realizing it needed a longer beta to work on the consumer user experience.

“That’s something that’s very high on our priority list, if not at the top, the initial user experience,” he said. “One of the reasons that we set up our pre-order campaign as we did, which is not the Kickstarter route in that we didn’t actually take payments upfront… one of the factors there is that our number one bar is shipping the product that we want to ship, and not being in a situation where we’re holding people’s money hostage and they’re pounding on our doors, which might encourage us to ship an earlier or less refined version than we’d be comfortable with.”

MYO has kept the launch date vague and pre-orders, while they involve providing credit card information, don’t result in charges until product leaves the warehouse. This allows Thalmic to ensure that the user experience is where it needs to be to provide the all-important first impression necessary to win customers for life, rather than turning them off the concept of novel interaction paradigms altogether.

It’s still a challenge, and one that not only Leap Motion but also Google, with Google Glass, is also facing. Charting unfamiliar territory, and doing it in such a way that wins inaugural customers over right away, is especially difficult with hardware, where it’s much less easy to iterate quickly and fix early missteps. Thalmic now has an additional $14.5 million in the bank to help it make sure it makes the perfect first impression, however, which will hopefully help buy it the time and talent it needs to come up with the perfect recipe.

Article courtesy of TechCrunch

A new startup called Pics.io out of the Ukraine hopes to take the next big leap in the online photography workflow, by making browser-based, fully collaborative RAW image file processing a reality. The team has plenty of experience working in digital photography, and is now looking for funding to help turn its very basic prototype into a full-fledged, shipping product.

Pics.io consists of a team of three founders, including Konstantin Shtondenko, the head of marketing and PR; Vlad Tsepelev, the technical lead; and John Shpika, who brings everything together. Their ambitious goal is to unseat Adobe as the industry standard for RAW photo processing, and they have backgrounds in medical imaging, commercial photography and more to make that happen. The company is currently bootstrapped, but it has already managed to build out proof-of-concept designs and a rough working prototype on an extremely small starting budget of around $3,000 U.S.

“We set a goal to elaborate a number of concepts into the photographer workflow,” Shtondenko explains about the genesis of the project in an interview. “I mean concepts like zero footprint approach or really fast image processing using GPU. Then we developed a proof-of-concept for each of those ideas to make sure they could be done at all. I was really surprised that almost all ideas were technically ‘doable’.”

From those beginnings, the Pics.io crew assembled its proofs together into a basic prototype, and began shopping that around to the photographer community it had built strong ties to with TopTechPhoto, its Lightroom plugin-company. Feedback so far has been amazing, Shtondenko says. “Right now we’re working on production version of the service that will include the ideas we started with, and a lot of details we got from that deep research,” he said of the product’s current state. Around a month from now, the startup will begin onboarding the first users, and they hope to release the product wide by the end of the year.

There’s one looming difficulty for Pics.io, and that’s for Adobe to step in and take its cloud-based shift to its logical conclusion. A version of Lightroom that allows for greater collaboration and operates in the browser could potentially threaten to occlude Pics.io completely, but Shtondenko says that’s not something the company is going to let stop them.

“Adobe is a giant, but who says that there should be just one solution?” he said. “We’re sure that even if Adobe ships in-browser raw converter we will find our audience. We have a pretty consistent vision that goes far beyond just another raw converter or DAM (digital assets management) system.” The company plans to go beyond just Pics.io and release other products as well, he notes.

Something like Pics.io is the next natural evolution of offerings like Aviary, but designed specifically for a professional or enthusiast photographer crowd. A lot of startups are gaining attention and traction targeting photo opportunities, and Pics.io seems like it could hit a particular note among ad agencies, photo studios and media companies that could prove quite lucrative. The startup is at an early stage now, but what it’s already accomplished bodes well for the future of in-browser RAW processing.

Article courtesy of TechCrunch

The rush of new mobile messaging apps, building on the popularity of services like WhatsApp and Line, continues apace, with the latest twist is a service for business users. CoTap, an app co-founded by Yammer ex-chief product officer Jim Patterson and ex-senior director of engineering Zack Parker, has picked up a $5.5 million Series A round led by Charles River Ventures, an early Yammer investor before Microsoft bought that company for $1.2 billion. CoTap is still in stealth mode but plans to use the funding to staff up and help launch its first app, a free service, later this year for iOS and Android devices.

Also participating in the round was Emergence Capital Partners, another early Yammer investor. As part of the investment, CRV partner George Zachary and Jason Green from Emergence Capital Partners will be joining CoTap’s board of directors

Just as Yammer brought already-popular Facebook-style social media services into the workplace years ago, CoTap’s enterprise service mimics WhatsApp, MessageMe and Line in mobile messaging, but in a more secure, private, enterprise-friendly format.

Consumer messaging apps have disrupted carrier-controlled, metered SMS with their fast, feature-filled services, and while CoTap may not be launching cute stickers any time soon, the idea will be to bring a similar function to business users. In the words of Patterson, CoTap’s CEO, it will remove some of the “overhead of email” such as salutations and signatures and get right down to the essence of what you need to say to someone in a faster, and maybe more casual way.

“Our goal here isn’t to dehumanize corporate communication or remove all grammar and etiquette from the way people communicate at work, but to make it slightly more efficient, which we think will increase overall communication,” he told TechCrunch. “However, ultimately the users will choose how they use a service like this, but I suspect the usage patterns will mirror how people use text messaging in their personal lives.”

Patterson describes CoTap as “almost the opposite” of Yammer, with the latter focused on open messaging and the former on private. “With Yammer, the primary message is, by default, public to your entire company, whereas with CoTap messages will be private to only the people explicitly addressed, either in 1-to-1 or group conversations,” he says. Like the difference between Facebook and WhatsApp.

But while Facebook has made a significant move into messaging itself, to position itself as a provider of both shared and more direct exchanges, Patterson doesn’t believe that Yammer (and Microsoft) can pull off the same feat. “It’s really hard for a single product to be both open (social) and private messaging,” he notes. Even with Facebook putting a “major focus” on private messaging these days, he notes, it remains a challenge for it to expand because it’s “just hard for users to understand what they should do.”

And perhaps as a reflection on some of how that tension played out at Yammer itself, he notes, “It’s also hard on the product teams internally to decide where to apply focus. Should they be working on features to push people to share more in the open, or features to push people to send more private messages?”

That extends to how the services are sold to users. “It’s also hard from a product marketing perspective,” Patterson says. “Facebook and Yammer’s marketing messaging are both around making things more open and sharing more. It’s confusing if they are simultaneously trying to push features that are the opposite of those ideals.”

If it sounds a little like Patterson is selling Yammer and its capabilities down the river, that’s not totally the case, either.

“I don’t really see these two things as competitive,” Patterson says. “Open messaging is useful under some circumstances and private messaging is useful in other circumstances. Even though I left Yammer and started a company focused on private messaging, I am still a big believer in the power of social sharing in the workplace. Communication isn’t zero-sum,” he notes.

“Look at all the sharing going on in Facebook today. Social networking didn’t ‘steal’ all that communication from another medium; it created more of it. Conversations and connections simply weren’t happening before, but now are, because it’s so easy. And in spite of so many people saying email is dead, there are still more emails being sent today than ever before. I believe that making it really easy to send a private message to a coworker or group of coworkers from your mobile device will have the same effect of creating more communication and connections within a company and not necessarily at the expense of any of the existing channels for internal communication.”

There will be another notable way that CoTap will diverge from the likes of WhatsApp as a mobile messaging service for business users. CoTap in its basic form will exist as a free app, but there will also be a paid tier that will integrate with other communications services that enterprises are already using. “This will be part of our paid offering to businesses, but we’re not ready to talk about any details around that yet,” Patterson notes. The service will let users attach links and files to messages — the equivalent of stickers and pictures in the consumer mobile messaging apps. It’s not clear whether these will be features available in premium or free versions of CoTap.

It’s the focus on new mobile platforms like smartphones and tablets that attracted CRV and Emergence to back CoTap; the Yammer connection didn’t hurt, either.

“The use of smartphones in the workplace is still on the rise and soon text messaging will be one of the primary ways employees communicate,” Zachary noted in a statement. “Jim and Zack’s past experience at Yammer has primed them to understand modern workplace communication and bridge the gap between end users’ and businesses’ needs.”

Nevertheless, because this is aimed at workers, CoTap will “probably” eventually also roll out a desktop app, although Patterson and his team are focused on optimizing CoTap for mobile. “Where we go after launch will in large part depend on how people actually use the product,” he says. “I have my instincts on how people will use it, but I also know that your users always surprise you in some way. I wouldn’t be shocked if the next platform we end up supporting is Google Glass or the Pebble watch rather than Windows or OS X. Part of being an early startup is trying to optimize for the future rather than the present.”

Article courtesy of TechCrunch

Editor’s note: Kakul Srivastava is CEO and co-founder of Tomfoolery, Inc. She was General Manager for Flickr from 2004 – 2009 and helped the product grow from 37,000 users to over 60 million. Simon Batistoni is VP of Platform and co-founder of Tomfoolery, Inc. He joined Flickr in 2006 as the engineering lead for internationalization. 

People can’t help but look at the Tumblr acquisition through a lens colored by the many examples of large, public (and often screwed-up) tech acquisitions by Yahoo and others — Marissa even refers to it in her blog post announcing the deal.

As leaders who helped to guide the Flickr team in its early history at Yahoo!, we had front-row seats as Flickr was (sometimes painfully) integrated with the larger Yahoo! organization. Despite this pain, we believe that Flickr has come a long way as part of Yahoo!, and yesterday’s announcement of a major redesign and refocus is a testament to the continued excellence of the core Flickr team.

Kakul, a product/business professional, joined Flickr just as the ink dried on the acquisition deal. She represented Flickr’s needs through painful acquisition-integration check-ins and figured out how (and if) any of Flickr’s roadmap needed to change based on Yahoo!’s larger corporate needs. Simon, a hacker/engineer, was responsible for creating the translation technology and internationalization infrastructure that allowed Flickr to begin serving customers in Yahoo!’s overseas markets.

Navigating an acquisition can be tough, and though there are a number of differences between Flickr in 2005 and Tumblr in 2013, there are striking similarities:

• Yahoo! is on an upswing — at least in hype — and hope is rampant.
• The advertising powerhouse has acquired fast-growing sites featuring rich-media content and extremely passionate communities.
• There are ardent reassurances that independent growth will be nurtured.
• Both products are missing “e”s in their names.

So as former Flickr employees, here is some practical advice from us to our friends at Tumblr, humbly shared:

Don’t pretend it’s not happening or that it doesn’t matter.  

Regardless of who’s involved, acquisitions always make communities nervous, if only because they represent significant change. For some people, an acquisition can feel almost like a betrayal, and some Tumblr community members will be looking for any reason to justify their distrust of the situation.

The more honest you can be about the direction you’re taking and the reasons behind it, the better. Give your members a means to easily communicate back to you — the Flickr Forum, while sometimes contentious, has always been a great bellwether of how the community feels, as well as an opportunity for the team to explain and (hopefully) reassure.

Open discussions can be exhausting to manage, but they’re often more rewarding (and instill more confidence in your community) than pronouncements with no outlet for feedback. Avoid reassuring platitudes that gloss over the issues – if putting ads on the Dashboard will allow you to reach a goal of tripling annual revenue, it’s better to say so plainly. Honesty is appreciated by most communities, even if the truth is unpleasant.

Don’t forget you’re awesome.

Merging your company culture with another is a bit like combining a Trifle and a Tiramisu into a single dessert, layer by layer — hard work, probably messy, and it might taste a bit weird for a while. Losing focus on how you all work together can make the difficult moments seem worse than they really are.

Don’t forget that your culture isn’t just important to you — it’s important to Yahoo! too. Over the years, Flickr had many opportunities to influence the wider culture at Yahoo! including:

• Innovative approaches to database sharding, website localization and geographic data handling which were adopted by other teams, and informed company-wide initiatives.
• A highly productive team culture focussed around continuous deployment, which influenced a general trend towards faster development of many Yahoo! products.
• Faceball, one of many ongoing experiments in office clowning, which became something of an official Yahoo! “sport,” and was even played live onstage by senior company management.

Tumblr can set new precedents on how to join and influence Yahoo!’s culture and management. Equally importantly, a truly strong product is usually the result of the strong, connected team behind it. When acquisitions wither on the vine, it’s often a symptom of that team having dispersed over time, taking too much knowledge and culture with them.

However, the magic that really binds a team is larger than any one individual and can persist through multiple “generations” of people, provided everybody feels ownership of it. Ensure that new team members understand the value of the culture you’ve built, and the history that led you from being an experimental blog engine to a 400-million-user powerhouse.

At Flickr, we had several traditions to aid in ensuring that history and culture were passed along. When veteran members left the team, they were asked to provide a “last lecture,” summarizing the most important things they knew, and the lessons they’d learned at Flickr. Equally, new employees spent time with managers from each department during their first week on the job, learning more about how the team operated, the product philosophy, and the engineering infrastructure that made it all work. Every new Flickr team member was also encouraged to spend a day answering member help questions, which allowed everyone to understand how to communicate with the community, and the common problems they had with using the product.

Finally, the importance of goofing around was also underscored by regular bouts of spontaneous dancing, foam-dart wars and liberal posting of lolcats on the walls.

Plan for the Bear Hug.

Yahoo is a friendly place — and everyone will want to greet the new neighbors. Everyone will want to figure how they can work better with you. Everyone will have ideas about what Tumblr can do to support their property. By and large, these meetings come from a genuine desire to be a better partner, but they can take time and focus away from your core mission and slow the whole team down. Sometimes too much of this “love” can be overwhelming, and at times it definitely led the Flickr team to handle the overtures less than gracefully. In some cases, this led to relationship management headaches for years.

Allocate a “first point of contact” to triage the ideas and opportunities that come your way. Filtering in this way will allow you to seize the best opportunities and execute well on them, without draining your resources trying to handle too much. And remember that, while the occasional approach will be from someone furthering an agenda of their own, most folks are trying to help both Yahoo! and Tumblr get better. Even if their approach is clumsy, they mean well.

Think bigger.

Tumblr has promised to continue executing on its own roadmap, and right now that’s essential. But Yahoo! wants 1+1 to equal 5 (or even 15), not just 2. Back when Flickr was acquired, it seemed everyone was thinking about what the “Flickrization of Yahoo” might mean — except for the team at Flickr. We just wanted to keep Flickr as “Flickrized” as we could. In our case, we missed out on some promising avenues for product improvement and growth.

Don’t forget to leverage what Yahoo! can really add to your business. Whether it’s 24-hour datacenter support, the world’s largest Hadoop cluster, international legal expertise or better Tumblr schwag, you now have access to the resources of a large company that wants you to succeed. Relying on these resources whenever you can will free you up to focus on the things — your core team and your product — that you’re truly the experts on.

Know how deep the rabbit hole goes.

For both parties to really benefit from the acquisition, Tumblr will need to embrace certain Yahoo! technologies and infrastructure, but sometimes a successful integration can be much more complex than it initially seems. Will it require that you host Tumblr in Yahoo! datacenters? Perhaps you’ll also need to start using Yahoo! IDs or introduce new features to comply with foreign laws? When large, complex “sub-problems” crop up halfway through a project, the knock-on effects can cost months of time to address.

Make sure you’re always asking questions and scoping out the entire landscape – a large company like Yahoo! has some intrinsic challenges and approaches that will be unfamiliar, and you need to be ready to embrace and work through them. Being a part of Yahoo! will subtly change a few things about how you do business.

• You’re a bigger target for hackers hoping to get access to Yahoo! data, or to “punish” Yahoo! for a mistake that might have nothing to do with you.
• You’re a bigger target for opportunists like patent trolls looking for a quick payout from an “Internet giant”
• Yahoo! is a multinational company with offices in many countries — the legal landscape in which you operate will likely change as a result.

Don’t be afraid to reach out to people for a “gut check” even if you feel like you’re asking a silly question. It’s better to spend 20 minutes before you start ensuring that your security measures are adequate, or you’re legally compliant, versus having to significantly rework a project after you thought it was finished.

Parting Words.

We are still passionate advocates of Flickr, we use Yahoo! Mail, and run our company blog on Tumblr.  We are thrilled about these marriages and can’t wait for you all to show us how well it can be done.

Article courtesy of TechCrunch

“If you’re not paying for the product, you are the product” is a truism that Yahoo! wants to monetize with its $1.1bn cash purchase of Tumblr blogging platform.

With 108m bloggers generating 13 billion page views per month on the NSFW-oriented (Not Suitable For Work – read – adult content) Tumblr, Yahoo! is hoping to turn eyeballs into advertising revenue (perhaps using its other recent purchase Summly to curate and summarise Tumblr topics).

Will it work where Yahoo! has failed in the past (think Geocities, del.icio.us, Flickr..)?

The challenge is simple - convert Tumblr into profitable advertising space.  But the solution is less evident.

Tumblr generated just $12m in revenue in 2012 – valuing the company in the real world at $36m – not $1bn. If plastering pixel-spam on Tumblr dashboards and posts was a really good idea, wouldn’t Tumblr have done it already? Facebook has held off haemorrhaging users by not turning Instagram into advertising space (yet), and Google has gone on record promising not to pollute Glass-vision with ads. Perhaps Yahoo! has something different up its sleeve – more than old-style interruptive advertising imported online? But given the ‘adult’ nature of much Tumblr content, how many big advertisers would want to take the PR risk advertising alongside explicit content?

So what if Yahoo! pivots Tumblr away from advertising and towards commerce?  We’re not talking the roaring trade that Tumblr could do in selling ‘adult toys’ and ‘adult content’ – but a bigger social commerce opportunity… Here are three ideas;

1. Since so many Tumblr blogs are themed (most fetishes appear to be covered), could Yahoo! allow bloggers to post a ‘shop’ button on the blog’s menu, that picks up the ball that Google shopping recently dropped with a decent price comparison/top picks).  A revenue share with Tumblr users – a la YouTube – could work? Think Google Shopping 2.0
2. Building on the themed nature of Tumblr blogs, the blogging network would make a ideal platform for a new generation of group-buy commerce – allowing like-minded people to come together and get great prices if they buy in bulk. Think Groupon 2.0
3. The simplicity of Tumblr would make it ideal as a next-generation e-commerce platform, making it easy to sell their stuff to communities of people passionate about a subject.  Tumblr has a real opportunity to tie this content + commerce knot, and become a leading e-commerce solution.  Think Etsy 2.0

Commerce and payments platform Marqeta today announced that it is the company providing the technology behind the Facebook Card, a gift card that can hold balances for a number of retailers or restaurants simultaneously.

Marqeta had agreed with Facebook not to disclose this until now. The announcement came as part of news about Marqeta’s latest round of funding: a $14 million Series B from Greylock IL, Granite Ventures, Commerce Ventures and a number of new angel and strategic investors.

The company’s +M Platform connects online and offline commerce through prepaid loyalty programs, similar to the Starbucks Card. It also allows prepaid amounts from multiple merchants, which is what Facebook is taking advantage of for its card. Facebook Card is a resusable gift card that can be loaded with balances for different businesses when a user’s friends buy them gifts through the social network.

When Facebook Card launched in January, Target, Jamba Juice, Olive Garden and Sephora were the only partners, making it not very compelling. It has since added Walgreens, Burger King, Outback Steakhouse and Staples — still quite limited and user awareness still seems to be very low. We haven’t seen Facebook make any efforts to advertise this offering, though it has been promoting Gifts overall across the platform.

In general, Gifts have been slow to take off, in part because of confusion about what Gifts are. Some users, remembering Facebook’s virtual gift shop from a few years ago, don’t realize the new Gifts are actual physical and digital goods. Others are skeptical because they think Gifts are a third-party app, not something from Facebook. Still others might not be using the product because they feel Facebook is not personal enough to send friends and loved ones presents through, or they’re concerned about providing their credit card information to the social network.

Until Facebook can better address users’ concerns and convey the benefits of Gifts — users don’t need to know a friend’s address, they can share the Gift on a friend’s wall or keep it private, payment information is secure — the product is unlikely to come into widespread use. If it can position it as a convenient but intimate way to show someone they care, then Gifts and Facebook Card might start to fulfill their potential as new stream of revenue for the company and shape commerce like Marqeta and Facebook seem to intend.

Article courtesy of Inside Facebook