Photobucket CEO Says Site is Fad-Proof

Posted on March 29, 2007

A Fortune article on CNN/Money says Photobucket has 38 million members and they are adding over 80,000 each day. Photobucket CEO Alex Welch told Fortune that the site is fad-proof because Photobucket is where social networking members store their graphics and photographs and they continue to use the photo storage service even they migrate to other social networks.
There is a secret sauce here -- once somebody has stored their photo somewhere they will guard it zealously. Their online social life, so built around images, depends on it. That is what excites CEO Welch. "We're fad-proof," he declares. "If one social networking site goes away and another comes up the user just moves, but their content stays with Photobucket." He tries hard not to compete with the sites where his users congregate, which he calls "the social edge." "We focus very much on not being a community," Welch explains. "We let the communities build around us."

A recent story on News.com tried to poke holes in the Photobucket, so to speak, by saying that "critics" claimed the business would be at risk if MySpace ever withdrew permission to host links there. But that's about as likely as MySpace simply ejecting members by the millions. If it prohibited their precious links it would face a user revolt.

But in fact the flexibility Photobucket gives users to shift their links to other sites does enable them to flee MySpace, something many teenagers have recently been doing as they migrated to Facebook, where security and control provisions are greater.

The real risk to Photobucket would be if the next hot social network were able to become popular while prohibiting linking from the outset. But given how users have learned to behave, that might be difficult to achieve.
Photobucket does have rivals in the storage business but they appear to be at the top of the pack based on a report last year that showed Photobucket had 44% of the marketshare. You can see lists of competitors here. TechCrunch has a post about how much Photobucket is worth. Valleywag says Photobucket will probably be sold to News Corp.

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