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Summary:

Yahoo is in the process of setting up an in-house incubator in an attempt to hold onto its expensive talent, sources say. The project, called Brickhouse, will be led by Flickr founder Caterina Fake. Big companies are no longer the safe havens they were during the […]

Yahoo is in the process of setting up an in-house incubator in an attempt to hold onto its expensive talent, sources say. The project, called Brickhouse, will be led by Flickr founder Caterina Fake.

Big companies are no longer the safe havens they were during the tech bust. Self-styled “startup people” — especially those like Fake, who were brought in through acquisitions — long for the bureaucracy-free feeling of going up against the Man, not being the Man. With funding so easily available, Yahoo’s stock treading water, and most of their options vested, it’s tempting to jump ship.

SideStep CEO Rob Solomon, who was employeee 2,100 or so at Yahoo, told me earlier this year there were perhaps 300 or 400 left of the employees who were at Yahoo when he started. Other recent departures include Rob Lord (Songbird), Bruce Karsh (Wink), Gary Flake (Microsoft Live Labs), Toni Schneider (Automattic/True Ventures {backers of GigaOM}), Derek Dukes (VideoEgg), and many more.

Big company incubation is certainly not new to Yahoo. Microsoft has an internal incubation effort called AdLab which is focusing on adCenter related innovation. Google has its Google Labs and 20 percent time. Yahoo is smart to try to hang on to its high-priced talent. Letting the web 2.0 cool factor slip away would be a costly aberration.

  1. this is definitely a good thing, and great to hear that yahoo is thinking hard about giving bright and creative technical minds the ability to think beyond short term business goals…take a bunch of smart folks, set them loose for some (or most) of the time, and you’re bound to turn up with some interesting and useful applications…isn’t this basically what elgoog has been doing? their 20 percent might yield a lot of crap, but alongside the crap comes a few nifty little apps and tools…it only takes one, right?

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  2. I think innovating from within and using the talent they have brough in from acquisitions will allow them to play catch up to their competitors. Yahoo may finally grow thru R&D than through acquisition which essentially could be cheaper and more efficient.

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  3. It will be interesting to see what comes out of that Incubator – I know Flickr has had some very cool 3rd Party apps created & that bodes well for the whole Web2.0 space. A lot of interesting Widgets & Mashups can be quickly developed & then easily dispersed across the Blogoshere.

    Not like the Old days of waiting years for a new version of Windows Word to come out – oh thass right we’re sort of kinda waiting for Vista!!

    NOT

    ;))

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  4. I wish them luck with this. I was involved in trying to do something similar in one of MSFT’s divisions a few years back but it didn’t take. The tech slowdown meant less money for corporate experiments and fewer employees with an appetite for risk.

    I’m interested to understand more about how Yahoo is going to define the success of this initiative and see whether they gives this the resources and time needed to demonstrate success (or failure).

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  5. Having jumped off the mother-ship a few times myself, I applaud Yahoo’s effort. When well funded and truly independent these arrangements can provide incredible leverage of the best and brightest. However, it’s a tough balancing act. It’s always tempting to pull folks back in to rescue faltering programs. Plus, projects that compete with large internal objectives often get starved.

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  6. “..especially those like Fake, who were brought in through acquisitions…”

    You meant Flake, right :)

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  7. Most of the companies that were “incubated” in the past were “aborted”
    This time it is different?
    Where have you gone Terry Semel?

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  8. They were a bad idea during the first bubble and they’ll be a bad idea during this one. Why would you try and hold onto someone who created a nifty little site but clearly doesn’t have big company dna? Other people can be just as creative, but they didn’t have the luck of being unemployed in 2001 and able to code AJAX. The tech industry is whacked.

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  9. the real bottom line issues – $$$ / comp / payola.

    for a truly hot idea, Yahoo won’t be able to pay these guys anywhere near what they’d make externally. Why stay?

    for a mediocre idea, well, what’s the point.

    while incubating an idea – angel funding + an ok paycheck while exploring isn’t too hard to come by these days.

    It’s hard to truly square the circle here.

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  10. I always think its funny the way big companies and VC’s think the entrepreneur behind a successful web start up are the genius behind the next big idea. Look. Rose did digg, it’s awesome and everyone loves it. It’s not the next NYTimes and he isn’t the second coming of bill gates or steve jobs. He had a cool idea and built it. Same thing with Fake. Everyone loves Flikr, nice job. But don’t expect her to come up with the next Flikr, she already did that. Anyway, it’s like Hollywood making sequels, they are never as good as the original and somehow cheapen the whole first.

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