• by Mark Walsh  @markfwal, December 18, 2012

The timing of the backlash against Instagram over changes to its terms of service that allow it to use subscriber’s photos in ads for itself and other businesses without compensation couldn’t have come at a better time for Yahoo.

The controversy erupts only a week after Yahoo rolled out an upgraded iPhone app for Flickr, its own photo-sharing app overshadowed in the last few years by the rise of Instagram and other photo apps. Now Flickr has a fresh opportunity to capture Instagram users abandoning the service over its updated terms of service.

Wired even posted instructions today for how Instagram users can download their photos and close out their accounts. It also suggested the new Flickr app as an alternative.

Separately, a Yahoo spokesperson pointed CNet  todayto a Flickr blog post last year in which it stated, “Our Terms of Service clearly spell out that Flickr/Yahoo! doesn’t own the photos that you upload. You, as a member, maintain all ownership rights to the photos that you upload to Flickr.”

And in the post announcing the new Flickr iPhone app last week, Yahoo noted photos can be "displayed beautifully" on Twitter, in contrast to Instagram's recent step to block direct integration with Twitter.

Instagram’s new terms of service doesn’t actually claim ownership of posted content. But it does say users "hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service.”

That was enough to send users streaming on to Twitter to declare their independence from Instagram. Exactly how many of the service’s 100 million users will end up leaving over the policy changes isn’t clear, especially in light of a statement late Tuesday by Instagram CEO Kevin Systrom insisting the company doesn't plan to sell users' photos. He said Instagram would revise its terms of service again to clarify its intentions.

In the meantime, Instagram's policy stumble is shaping up like an early Christmas gift for Flickr as it seeks to revitalize its brand.