Caterina Fake talked about this on Tim Ferris' podcast [1] and Gimlet's "Without Fail" together right, they applied for a government start-up grant when building the MMO and didn't get it. However they had accidentally chosen to automatically resubmit the application a year later.
Around the time the MMO failed, they received the grant from the second application. They had something vaguely similar to photo-sharing chat in the game, related to discussing inventory items, and decided to transition to that as a photo-sharing IM client and use the grant to get it off the ground.
> As part of the game, they’d developed this interface where players could create an inventory of objects that they would pick up. That inventory looked like this sort of shoebox of photos. You could drag those photos into group conversations for other people to see and you could annotate them. And you could share the photos with other people. And that was the idea that Caterina and the people on her team wanted to transition to.
(from 2.)
As an aside, I highly recommend listening to the full interviews, as she has an interesting background and some good perspectives on tech in general. She also just launched a podcast that considers the ethics of some new tech developments [3].
I was replying to somebody who was annoyed that somebody was surprised there was a photo uploading and sharing feature. It’s a surprising feature because it isn’t a major mechanic.
I am seriously withholding my urge to spam question marks on this page as they are dancing around my head.