Goodbye to Google's Hello

Google Picasa is an excellent photo service, though in my view and those of many others it is not as good as Yahoo's Flickr, which most would say represents the leader and key innovator in the competitive-but-not-lucrative photo sharing, storage, and photo community space.

Part of Picasa was a service called "hello", which allowed photo commenting in real time and as Matt Ingram notes "hello" was actually a great application.

So why will Google close it down on May 15th?

The likely answer is that it's a drain on Google's human resources without presenting a clear path to profitability. In simple terms, hello has probably failed to capture enough interest to make it worth Google's precious time. Perhaps Google could have put more resources and promotion behind the tool, but I think in some ways Google is comfortable having left the online photo business to Flickr and others.

One of Google's many brilliancies is focusing laser-like on those aspects of the business that they do very well and that do very well for them. Search is the key, and it's made Google one of the most successful companies in business history. Contrary to their sterling reputation Google has actually failed to deliver much if any profit in the key online venues of video sharing (despite owning the major player YouTube), photo sharing (despite owning Picasa), and social networking (despite owning Orkut). Google's failure in these venues is conspicuous given their success in search, though this probably mostly just shows how fickle and habit-driven we are as online application consumers.

Flickr Video by April

Flickr, Yahoo's popular and successful photo sharing site, will provide Video sharing by April. Dan Farber reports on his interview with Flickr Co-Founder Stewart Butterfield, who along with his wife Caterina Fake and their staff developed Flickr several years ago as a supportive service to their game development and wound up focusing exclusively on the photo sharing capabilities. Yahoo purchased Flickr from them for a reported sum of about 20 million, which by today's standards may make Flickr one of the greatest Web 2.0 undervaluations in history.

Video sharing in a socially networked environment is definitely on the radar screens of all the major players despite the fact nobody has figured out how to monetize it. YouTube remains the key player in the space, serving up 1 of every 3 online videos. However Flickr entry into this market may have an impact, as Flickr enthusiasts tend to represent many developers and early adopters in the online space. That said, Yahoo's challenges in the recent launch of Yahoo Live service may indicate they'll have trouble making a dent in YouTube's video dominance.

Disclosure: Long on Yahoo