As Yahoo announced its acquisition of Tumblr and a significant update to Flickr in the same day — my first reaction was, “why did they blow their load in one day?” Our news cycle is short, but even as short as a one-day cycle, Yahoo in essence snowed in its own product upgrade announcement. I think the long-term implications of 1TB of free storage could be just as big, if not bigger, than the Tumblr-as-a-media-play-news for Yahoo’s treacherous climb back to the big-kids table.

So here is what we learned:

• All free accounts get 1 terabyte of free storage
• Flickr’s website got a refresh an overhaul
• There is a new version of the Android app
• Partner-centric philosophy, images on any screen, on any social network, for any user
• There are currently 89 million customers on Flickr
• Yahoo is killing-off Flickr Pro accounts, meaning no new Pro accounts are available
• Flickr Pro users who renew will get unlimited storage and an ad-free experience

It’s what we didn’t learn that piqued my immediate interest though. 1TB of storage (albeit photo storage).  That will immediately wet the whistles of an awful lot of bleeding-edge techies. 1TB of photo storage makes you wonder what exactly Marissa Mayer and Yahoo have up their sleeves for the consumer cloud space. Is Yahoo positioning itself to eventually jump into the cloud storage wars against Amazon S3, Windows Azure, Google Cloud and the likes?  Or will Yahoo stick to a consumer-centric model that’s streamlined and device-agnostic?

Long-tail cloud

Let’s not forget, Mayer comes from a company named Google, one that has Gmail, Drive and a slew of other products that have been cultivating a consumer dependance on cloud storage.  Could Yahoo and Mayer be leveraging their infrastructure for a consumer service that offers combined storage for the gamut of Yahoo products? Could Yahoo’s gift of 1TB Flickr space turn into a Dropbox-like offer in Yahoo’s product pipeline, following a path that’s taken Dropbox directly into the enterprise space?

And that is where Yahoo’s cloud play becomes clearer. Every major tech company is offering a so-called “Dropbox killer” these days, and it’s an easy task for the web giants that have the hyperscale infrastructure to commoditize storage for consumer and enterprise use. Amazon’s Cloud Drive, Apple’s iCloud, Google Drive, or Microsoft’s SkyDrive — all the other tech giants have their hands in that cookie jar. Here’s where things get interesting:  Microsoft’s 7GB of initial free storage to users is the best offer amongst the players.  While it’s only photo storage right now, Yahoo just offered you 1024GB (1TB). That’s 146x greater than SkyDrive’s initial offering.

Even if Yahoo’s only grabbing your attention for photo storage, is that enough to lure you from saving items directly to your harddrive, or searching Facebook and Instagram for stuff you posted last year? I’m not outright calling this a bait and switch play (keep reading), but as the web giants craft a services model around their consumer products, pricing, the amount of storage and the associated ways in which to utilize that storage will be the main differentiators amongst Yahoo and its rivals.

Cloud apps + services = more storage demand

In April, Yahoo tried to address its cloud storage shortcomings by announcing Dropbox’s integration with Yahoo Mail. It let you store attachments in Dropbox and share Dropbox files via e-mail; but it was a duct tape fix at best. Gmail+Drive and Outlook+SkyDrive integration are both built-in. A Yahoo Mail+Drive offer would be a whole lot more helpful to users, and would make a nice tie-in to Flickr.

With current estimates of the cloud storage market cap at $50 billion, here is the $50 billion dollar question: Could Yahoo handle the bandwidth requirements of a ydrive? It’s one thing to give 1TB of free photo storage to 85 million (the majority who, if you were admittedly candid, will likely never upload 100GB, let alone 1000GB+).  It’s a completely different story to let 376 million (Yahoo Mail + Flickr estimates) users all of the sudden store 1TB of documents, photos, music, and video files in the cloud.

That 376 million number doesn’t even take into account 105 million different blog owners that Tumblr hosts (with a reported new 120,000 signups every day.)

Everything feels right about Yahoo making a huge leap into the cloud with a Yahoo Mail + Yahoo Drive + Flickr cloud storage solution. Those jockeying for your attention with consumer “infrastructure” as a service are only now starting to ramp up, and things are only going to get more competitive.

Do all consumer cloud paths lead to the enterprise?

If Yahoo is in fact working towards a solidified consumer cloud service, then one must also wonder if Yahoo’s eventually hoping to make its way to the enterprise?  Dropbox, Box, SugarSync and YouSendIt have all started with consumer cloud products, sneaking into the enterprise through the back door as users started accessing and managing work files on mobile devices.

Yahoo’s rival web giants have also started straddling the fence, commercializing their specialized infrastructure for both consumer and enterprise sectors.  Amazon, Google and Microsoft are among the most notable, and all three of these players are fiercely eyeing the enterprise space for expanded cloud management solutions.

But despite Yahoo’s long-standing presence as a web giant, and its data management innovations with Hadoop and Hortonworks, Yahoo may be better off sticking to the consumer space,  according to Wikibon Senior Analyst Stu Miniman.

“Well, Hortonworks came from Yahoo and Yahoo properties are probably second only to Google’s. That being said, not sure that they are looking to push into the [enterprise] cloud marketplace,” Miniman says.

And Yahoo’s not the only one.  Facebook is another web giant that’s succeeded by scaling its fresh spin on datacenter design, inspiring a graph-based approach to data management.  But that doesn’t mean Facebook should extend its consumer-centric model in hopes of competing with the likes of Amazon and Google for the enterprise.

“Facebook definitely has put a ton of money into architecture. It probably has the largest photo repository in the world,” Miniman goes on. “Facebook also uses Fusion-io as a key enabler of fast response time. But, I don’t see how it makes much sense for Facebook to transition to trying to serve the business marketplace, as you point out, it’s a consumer focused company.  Amazon had a long history of dealing with suppliers and Google has a strong business focus.

“Facebook’s ill received mobile offering shows that the company isn’t ready to branch out.”