More on Flickr and fair disclosure

The acquisiton of Flickr by Yahoo! still baffles me. Not the deal itself which was widely rumored and seems to be a good fit. No it’s the nature of the announcement. It was made via a post on Flickr’s blog on a Sunday afternoon. The content of the post is largely aimed at Flickr subscribers who are a loyal bunch and understandably don’t want the service to change (the 207 trackbacks show the depth of feeling). But there has been no press release about the nature of the deal itself for Yahoo! investors or The Street.

Speaking to sources at Yahoo! PR yesterday there was no intention of making a formal announcement. This is for a deal rumored in the region of $30-35m (I heard as much as $50m today too). And I’m not the only one wondering whether this constitutes fair disclosure. Andy Lark, Sun’s former PR supremo and now transparency evangelist, has been researching it too. Speaking to lawyers, he believes that a blog post does not represent fair disclosure as yet. Though he speculates it may in future.

I met the charismatic Fergus Burns, CEO of Nooked today and discussed this issue. He wondered whether the acquisition had affected the share price, suggesting if it hadn’t perhaps it wasn’t meaningful enough for an announcement. That’s also the impression I got from my contact at Yahoo! – it’s just too small ($35m??). A good point, so here’s the share price from Yahoo! Finance. And no – it seems there wasn’t much impact (see Monday’s trading).

But can we conclude then that the strategy was justified? The share price didn’t move so we were right not to announce it formally? I think that might also prove the opposite. The share price didn’t change since the deal wasn’t properly communicated. The only message given out was aimed at customers not investors, so how could they understand the strategy or the impact?

Another interesting point of contrast is with the other major deal this weekend – the IAC/InterActiveCorp bid for AskJeeves. That was announced more formally and covered in the mainstream media broadly (New York Times, Washington Post). And the Flickr deal? Barely a mention in the mainstream media beyond the trades like CNET. Granted they’re on different scales (the AskJeeves deal is $2bn), but perhaps the lesson we learn is that while blogs are great for audience interaction and feedback, they’re just not the right mechanism for acquisition announcements. Not yet anyway.