Bernhard Warner
Star musicians and your favourite Times writers at the Albert Hall
Usually, when a company launches a hostile takeover bid for a rival, one group is left standing on the sidelines powerless to do much about it. That would be the customers – you and me.
Company directors want to hear from customers in good times, but when a predator is pounding on the gates, the only customers who get a say are the ones with shares in the company. And even then the ability of the individual shareholder to nix an unsavoury deal is extremely limited. Shareholder activism of late has had more success with ousting under-performing chief executives or overpaid, unresponsive board members (Sainsbury’s and Coffee Republic are just two in the past few years), but this is the exception rather than the rule. The shareless customer, regardless of how loyal he or she has been, is even more at a disadvantage.
Don’t tell that to Flickr users. Within hours of Microsoft announcing its $44.6 billion bid for Yahoo!, users of its popular photo-sharing website started to mobilise. By this morning, more than 2,190 users had joined an online petition aimed at stopping Microsoft from buying Yahoo!, the parent of Flickr, and turning the site into ‘MicroFlickr’.
The Flickr group “Microsoft: keep your evil grubby hands off of our Flickr" is blunt. It reads, “We, the undersigned, wish you would just leave Flickr alone. OK?”
It’s hardly a legally binding compact. What follows is an emotional plea to Jerry Yang & Co to say “no” to the Microsoft cash. (Of course, whether it’s posturing or a legitimate distrust of a merger with Microsoft, Yahoo! is frantically looking for a white knight to rebuff the software giant.) What follows on the Flickr message boards is the typically hysterical Microsoft bashing you find in many social media forums dedicated to technology. The concerns range from the cleverly outrageous (some message board commentators predict the scenario of Flickr users unable to upload photos unless they make the switch to Vista) to the cautionary. Quite a few Flickr users vow to pull their snaps from the service, saying they will never share with the world their favourite pictures on a site owned and operated by Microsoft. As one petitioner writes:
"Flickr has a great community and provides lots of inspiration, but if Flickr becomes part of the MS company, I'd have to delete all the images I've uploaded, and will not renew my membership. This was really, really really bad news."
This being Flickr, there are also clever protest messages told in pictures. My favourite is here.
While there is no precedent I am aware of where a protest born on the message boards of a social media forum has sunk a big business deal, there is some recent evidence that a customer revolt, mobilised online, can get a big company to reconsider major business decisions.
The most successful moment of online consumer activism occurred last summer when a Facebook-organised student revolt sprung up attacking HSBC for introducing higher overdraft charges for recent graduates. Amid the backlash, the bank backed down and abandoned the charge. It was hailed as the first successful Facebook-fuelled protest to get a major company to change policy.
There have been more. Last Autumn, users protested against Facebook itself for introducing a marketing scheme that revealed details of users’ recent purchases to other Facebook users. Like HSBC, Facebook pulled the plug on the plan after a massive online user revolt. And more impressively, Facebook users in Colombia set up a page dedicated to protesting against the Revolutionary Armed Forces of Colombia, or FARC, the country’s largest rebel group, which routinely kidnaps civilians to be used as a political bargaining chip. Some 270,000-plus Facebook users were credited with helping protesters organise a 250,000-person march against FARC on the streets of Caracas earlier this week (smaller protests were held in 140 other cities).
With the likes of Facebook, Flickr, YouTube and MySpace, activists have never had such powerful tools to mobilise the masses to protest. In an instant, online users can join a revolt today in Caracas, yesterday in Myanmar and tomorrow, perhaps, in Redmond. As the ranks of disenchanted Flickr users swell, Microsoft will have to consider the growing dissent as it plots how to proceed with its bid for Yahoo! It should be asking itself: is it worth buying the company for nearly $45 billion if it triggers a mass defection of users?
The customers are speaking. Shareholders should listen.
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Bernhard Warner, a freelance journalist and media consultant, writes about technology, the internet and media industries. He can be reached at techscribe@gmail.com
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