This isn't going to help Photobucket with its efforts to sell the company. Late last night MySpace moved to block its members from posting links to videos hosted on Photobucket.
Photobucket had been trying to expand it's business from photo hosting to video hosting by offering users a suite of editing and production tools to spur the loading of video. The still photos it hosts remain unblocked.
Scoble offers a little tough love for users of Photobucket's video service:
If you want to avoid these issues there's really one choice: pay for your site's own hosting and build your own traffic. One reason to join services like MySpace and Wordpress.com is that there's a built-in level of traffic.... If you go off and build your own site you don't have those advantages, but you've got to live with [it] when they pull down parasitic services, which is what Photobucket is.
Calling Photobucket a "parasitic service" is a little harsh. It's a backend business that provides photo hosting and video editing tools for free to users. That its value relies on user created linkbacks from sites it doesn't own doesn't make it any more parasitic than your average search engine. Still, its fair to say that Photobucket, like dozens of backend service providers and widget makers, rely for their success on the kindness of strangers.
Michael Arrington at Techcrunch offers a short term history lesson:
This is turning into a habit for MySpace, which usually claims bugs, security issues or terms of service violations were the cause of a shut down. In January MySpace mysteriously shut down all Flash widgets on the site for 2.5 hours. An Imeem blockade came next. Vidilife, Stickam and Revver have been permanently banned.
Clearly News Corp's war on widgets and add-ons continues.
Duncan Riley looks at the business implications for Photobucket, calling the MySpace move an "act of corporate sabotage" and wondering outloud if the move is designed to drive down Photobucket's asking price:
....when your product targets social networks and you've had access partially blocked to the biggest marketplace of them all...with the possibility of course that the ban could end up involving all content, your value drops, and drops dramatically...and because of this there's little doubt that News Corp has simply just screwed Photobucket over. I wonder if News Corp ends up buying Photobucket? What better way to squeeze a better price!
At Deep Jive Interests Tony Hung nails the lesson of the MySpace move for the development of the widget business:
If MySpace has an alternate video storage and management product cooking â€" which only has to be *just* has good â€" it will have no problem locking in its users. ....
And if MySpace *does* have an alternate to Photobucket, the next logical question is "what else do they have cooking?" There's been a spate of news around widgets which cross blogs and social networks. But if MySpace (and other networks) starts developing their own in-house widgets, it might signal a larger trend towards creating truly closed-in system...not only preventing people from leaving MySpace...but also increasing the height of those metaphorical walls which separate its users from marketers who are salivating at the chance to get at this demographic. Higher walls (to flog the metaphor) can only mean steeper tolls to get access to MySpace's users.
Scoble adds the observation that this will chill the climate for investment in businesses like widget businesses that rely on social networks to drive traffic.
That's certainly true. It's hard to invest in a business whose fate is in the hands of others (unless that business has a patent protectable technological advantage or some such defensible advantage). But I still believe that a secular trend is just beginning which will drive social networking away from walled-garden hubs towards more user directed networks. But a long term secular change is not going to help Photobucket build a consumer facing video business today. It looks as if, to do that, the company will have to launch a site of its own. Does anyone own the Videobucket.com domain?
Building its own social network seems to be the approach of one of Photobucket's start up competitors. Kristen Nicole at Mashable writes today that DivShare, a photo and video hosting service, has soft launched DivShare Groups-which allows users to establish their own hubs for sharing media. On its blog DivShare lays out the features-comments, RSS feeds, access rules and the rest of the social networking kit and caboodle.
In the traditional media business, power once accrued to copyright holders who often had no direct relationship with consumers-film and TV studios not movie theater and TV station owners. But the irony of the Internet media business is that even though it's offers a wide open distribution platform, hell, BECAUSE it offers a wide open distribution platform, power accrues to the company that can draw a crowd and develop a direct relationship with consumers. And the more that company relies on the network effect to draw and hold users, the stickier it is (think eBay). For now, News Corp and Facebook, remain the girls with the most cake.
Link Love:Â
Exclusive Screenshots: Spock's New People Engine
Techcrunch offers an exclusive inside look at Spock, a people-centered search engine
Â
link to original post