TechCrunch Teardown: Etsy, It's Crafty

Excellent question. Check out the comments. A few members of the community have questioned why they chose this elaborate process, which actually ended up with the new images actually having noticeably lower quality. This was noticed by the artists themselves, too, as Etsy's customers labor for a long time to get the highest quality photos possible. Etsy's response when this was brought up in the member forums was that they 'learned from this' and would take note for the future... a more satisfying response would be "we acknowledge that the images are inadequate and we'll re-do them".

Why Etsy thought they had to seek new image algorithms rather than just using the ones they already used is the sort of question they very rarely answer. My analysis is that it is related to the fact that they did the processing on an Amazon server. To save bandwidth, transfer time and processing time, they sent over the medium sized images rather than the original, full size image. Of course, that doesn't explain why they decided to do it in 'the cloud' at all rather than, as you say, just operate directly on the file system, in house.

They claim to have gone through an elaborate comparison process, apparently with the visual quality comparison being done by engineers - not people specializing in the non-technical side of photography or graphics. They seem to have entirely missed the quality issue, though it was apparent enough to customers that at least a hundred of them brought it up in the forums once the switch to the new image sizes was made.