Bronte Media

I’ll leave the ethics of whether MySpace should have blocked Photobucket Videos that served ads to another day. Moving on to more interesting questions: will there be much left if MySpace continues to block Photobucket? And the answer is a clear yes.

Techcrunch has the best wrap but basically the firm hopes to do $32m in revenue this year. That’s mainly from advertising on their site, and also some premium accounts revenue.

The CEO says that half of video views are on their site (notice he didn’t say half of all views, of media of any kind).

The way I would think of it is those distributing your widget on other pages are in effect a trial version of your experience. It’s an expensive one in the case of video but the flipside is that you are having one of the largest audiences on the web use your stuff (ergo you’ll always find a way to make money, and I’m not just talking about a sale of the company).

By virtue of Photbucket trying to sell itself we can get another peak into a business whose marketing strategy was built mainly on the distribution of a single uncompensated partner. And the end result is again a pretty good one. Youtube may have rose on the coatails of MySpace but they quickly built that situation into a sustainable one and converted into one of the largest communities on the web. Even though Youtube did $13m in revenue last year, their inventory is fairly valued (in today’s world) at $100-$200m/year with some fairly basic monetization.

Photobucket seems to building a similar situation on a smaller scale. Compete.com says they had about 25m unique visitors to the photobucket.com domain. So $30m this year in revenue isn’t a stretch.

The future may not be looking as rosy for Photobucket as it once was, but in any case it’s certainly not an all or nothing proposition with MySpace and they’ll have a nice little business without it. Whether that means the company is worth $300m is another question, however.