Yahoo Photos director Will Aldrich had earlier denied any plans for merging Yahoo Photos and Flickr. But it was probably not making perfect business sense for Yahoo to manage two competing photo sharing websites under the same umbrella.

Flickr co-founder Stewart Butterfield today informed TechCrunch that Yahoo! Photos is shutting shop and all existing Yahoo Photos! users will be migrated to Flickr. They'll also get a one-click option to export Yahoo photos to Photobucket or Shutterfly. And like Picasa and PhotoBucket, video sharing is meeting Flickr soon.

Download Yahoo! Photos
I was reading this interesting book - How Innovators Connect - coauthored by Techtribe founder Rohit Agarwal and journalist Patricia Brown, where they have interviews and success stories of Silicon Valley veterans like investor Ram Shriram of Google, Ashish Gupta of Junglee, Subrah Iyer of WebEx and many more entrepreneurs.

Here's an excerpt from the same book, using the current example of Flickr, that suggests "timing" can play a crucial role in the success of a company. Makes perfect sense.

Time to market, Be a trend spotter

In 2005, Yahoo acquired Flickr, a Vancouver, British Columbia based company that lets users upload digital pictures from computers and cameras, and arrange their photos into albums and include them in blogs and other postings. Timing was critical in this acquisition for a number of reasons, says Bradley Horowitz, VP of product strategy at Yahoo, and the primary coordinator of the acquisition.

Yahoo already had the world's most successful online photo site in 2005. But there are something Yahoo saw in a small company of just a dozen people: Their ability to build a community - or ecosystem - around the concept of photography was scalable. Flickr recognized the new keywords - social networking, interaction, and ubiquitous broadband. The Flickr founders simply connected the dots in a timely fashion.

Yahoo's Horowitz says there were four specific factors that drew him to Flickr:

1. User Generated Content - This was not new to Yahoo. Yahoo had been soliciting user generated content through Geocities for years - but it had not generated the mass appeal that was driving the Flickr buzz.

2. User Annotated Content - Although Yahoo had billions of photos up in its section called Yahoo Photos, most of them didn't have "metadata" built around them. In essence, Yahoo created a huge digital shoebox with billions of people's photos, while Flickr offered users the ability to organized their photos in a sophisticated and intuitive manner using tagging technologies. Flickr made it much easier for common people to add metadata to the photos. As a result, roughly 85 percent of the photos in Flickr were tagged or annotated with some human entered metadata.

3. Community Distribution - Following the open-source model, Flickr encourage its members to share photos among its community. Yahoo and other companies at the time went to extraordinary lengths to preclude people from using the photos that lived on its servers outside the context of the Yahoo! environment. The Flickr model turned Yahoo's business model on its head. Instead of positioning Yahoo as the destination site for these images, Flickr allowed Yahoo to pay for the storage and bandwidth, while encourage third-party sites - mainly bloggers - to use that content. Tens of thousands of bloggers began to use Flickr as their imaging backbone, Horowitz says. This drove up awareness and dependency on the Yahoo site after the Flickr acquisition.

4. Platform Distribution - Flickr delivered a great end-user service. But it also delivered the services and facilities that allowed the community of developers to continue enhancing their own services. In effect, they had developers that were not on the payroll building enhancements - like the Flickr Macintosh coupler - at no cost to Yahoo!.

Flickr Founders
Flickr co-founders Caterina Fake and Stewart Butterfield developed an ecosystem that was possible only because of specific trends occurring in the market at the time of their innovative thinking process. Flickr's innovators created an environment in which millions of people contributed and distributed photos while a combination of Flickr's internal team and external collaborators created new offerings.

"That's the leverage you get when take a risk and trust that people are creative, and trust in the idea that many people can do more than just a few," Horowitz says.

Update: Rohit has offered DI readers a 40% discount on the book (cover price: $28) if you enter the coupon code "tiediscount"