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Dow Jones & Company Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.An upstart photo Web site -- Photobucket.com -- has surged in popularity ahead of more established names. And it doesn't even sell prints.
Photobucket.com Inc., started by a photo buff who wanted a better way to share images with his friends, has seen traffic increase tenfold in the past year. In August, it had 12.2 million unique visitors, compared with 9.6 million at Yahoo Inc.'s Yahoo Photos and 5.9 million at Eastman Kodak Co.'s Kodak EasyShare Gallery, according to research firm Nielsen/NetRatings.
The site's popularity offers some insight into the changing world of digital photography. Instead of selling prints, Photobucket provides so-called image hosting, targeting Web users who are less interested in printing copies of photos and more interested in showing them off on their blogs and social-networking Web pages.
Photobucket said it is targeting a younger audience, including teenagers looking to dress up their blogs. Blogging sites like LiveJournal and Xanga don't allow users to upload photos to their blog entries unless they pay as much as $4 a month for premium services. Meanwhile, at the popular social-networking site MySpace.com, users are given enough room to store about a dozen photos.
Photobucket acts as a sort of virtual middleman. It provides a free service that lets users store hundreds of snapshots in photo albums on its site and link to them from anywhere on the Internet, from blogs to eBay auction pages. It does this by giving users the Web code needed to insert their photos on other Internet pages. When people visit a blog that is using this code, the images are automatically pulled from Photobucket's stored albums and displayed.
"Young people, in my mind, drive innovation," said Alex Welch, the 29-year-old founder of Broomfield, Colo.-based Photobucket. "Kids are always uploading photos. Every time they take new pictures, they want to upload them."
Photobucket is among a raft of similar sites with names like ImageShack and ImageVenue, which are seeing a surge in visitors as interest in blogging and social networking grows. The challenge for those sites, analysts said, is in translating that popularity into revenue. They generally offer their services free, relying on advertising or premium services for revenue. Photobucket offers 25 megabytes of free storage space -- enough for about 500 small pictures -- and offers more space in a premium package for $25 a year. Mr. Welch declined to say how many users have signed up for the company's premium service, or to disclose financial details.
Photo sites from Kodak, Yahoo and Hewlett-Packard Co. use a hybrid approach to making money on the Web: hook users by letting them upload their latest digital photos to the Web and share them free, then charge for prints.
The upstarts like Photobucket generate much of their revenue by showing users ads when they visit Photobucket.com to upload photos or view an album. It is a risky move: In the late 1990s, a host of photo- sharing sites tried relying on ads to make money, only to fold when the Internet bubble burst.
Analysts said use of sites like Photobucket.com represents a big shift in the way people use their cameras. "Ten years ago, everybody printed. It was the only way you could look at your pictures," said Charles LeCompte, president of Lyra Research Inc., a Newtonville, Mass., firm that follows the imaging industry. "Now, people are realizing you don't have to print. Printing is expensive."
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