CNet has a piece on the Yahoo-Flickr deal that gets at the heart of the deal. It’s about tagging.
On the most basic level, tagging helps to solve (with the simple addition of human editors) the problem we currently have when it comes to searching images on the web. I may upload a photo from a trip and label it Tuscany. Someone else may see that photo and tag it as a vineyard and still another person could see it as a photo of an Italian street sign that happens to be in the foreground.
Tagging helps me track my own photos, but more importantly, it enables my Tuscan photo to come up in a list of results when someone searches for Italian street signs.
Of course, even with the help of a massive web community, some photos will be harder to tag than others.
Now we’ll see if it will scale. If it does, we’ve found a low tech solution for a high tech problem and that is damn cool (and it can be extended to other web content as well – we’re already seeing it pop up all over the place). It will also mean that Yahoo will have an edge on Google when it comes to image search and that’s why they did the deal.