The marketing of Photobucket - Valleywag Comments

The marketing of Photobucket

brianball — Thu, 12 Apr 2007 01:17:43 PDT

@ Ian

I agree. My experience tells me the acquiring company has an idea for how to monetize the users by leveraging something they bring to the table. Could be expertise, an existing product/service line that becomes a backend upsell, or simply economies of scale that would make running the target company more profitable even if the numbers stayed the same.

brianball

The marketing of Photobucket

waynelambright — Sun, 01 Apr 2007 13:24:39 PDT

Smart investors know good investments are rare opportunities. Owning the leader in the photo-hosting marketsector for a mere $10 per user aquistion is a smart play.

Likewise, building on that investment with another strong niche player-one currently serving Bay Area craigslist and ebay users-makes a smart play even smarter.

Let's walk through the numbers, apples to apples: If you search cragistlist "for sale" in the Bay Area you'll find ImageDeposit.com owns a 10% marketshare of PhotoBucket users.

ImageDeposit.com has 40,000 Bay Area users and 53,000 users in total. How did we get there in just three years? Well we're not giving away the secret sauce-just yet-but I will say this, our current acquistion costs are just under $0.25 per user. If you want to know how to make your smart investment even smarter-call Wayne Lambright at (415) 750-1921

waynelambright

The marketing of Photobucket

Max Freak — Fri, 30 Mar 2007 01:45:24 PDT

Two points about the valuation:

1) Projected revenue for 2007 is 32M, so the multiple is not as fearsome as it seems. If this kind of revenue growth continues, a multiple of 10 (32 : 300) is OK.

2) Comparison to Youtube's acquisition. While simple pics are NOT as hot as videos, you can bet that the same users (35 million of them) who upload pics will soon be uploading videos too.

So the 300M price tag is not totally out of this world.

Plus, if the bankers say 300M, it's just an invitation for you to say 100M. You'll probably end up shaking hands at around 130M :)

Max Freak

The marketing of Photobucket

Scott Kidder — Thu, 29 Mar 2007 22:13:43 PDT

Look at Facebook's wildly successful photo product -- it came out of nowhere and, at least in the college demographic, blew everyone else away.

Not that I would expect MySpace to do the same... they don't exactly have a great track record of new product development. I'd argue what makes Facebook photos most valuable is how well it ties into the rest of the service.

Scott Kidder

The marketing of Photobucket

noahrobinson — Thu, 29 Mar 2007 21:56:45 PDT

Hmmmm, if PhotoBucket brings on 85,000 new registered users a day, that means it can generate, through co-registration alone, between $0.40 and $2.00 in advertising revenue per new user. And this potential revenue figure does not include potential earnings from return traffic. I don't know PhotoBucket's costs but they have significant opportunity to generate more revenue than they're already generating.

noahrobinson

The marketing of Photobucket

Ian Bell — Thu, 29 Mar 2007 17:35:11 PDT

I was surprised by the $6.3m revenue number. That is much lower than I would have guessed for a site getting 17m uv/mo. If Photobucket is truly worth $300-400m, that could mean the prospective purchaser must know how to monetize those numbers :)

I remember hearing that despite Diggs large traffic numbers, they barely broke even at $3m last year. Or maybe that was the year before. Anyways, moral of the story: traffic does not always equal proportionate revenue right?

Ian Bell

The marketing of Photobucket

trevo — Thu, 29 Mar 2007 14:02:21 PDT

If someone told me they were building YouTube, I would have told them they were nuts (due to the bandwidth costs), but at least I could see the advertising angle.

The notion of a Photobucket just seems like operating a storage locker for free but make money by showing advertisements to the owner when they move things in and out of it. I would've said this is a dumb model, but WTF would I know?

trevo

The marketing of Photobucket

ashkan — Thu, 29 Mar 2007 13:53:31 PDT

Definitely not worth $300-400M; this is investment bankers gone wild, plain and simple.

Here's a breakdown of the growth rates and why it does not add up:
http://www.watchmojo.com/web/blog/?p=1406

Enjoy...

ashkan

The marketing of Photobucket

Conrad — Thu, 29 Mar 2007 12:00:59 PDT

I can't believe all the fuss over an image hosting service. These kind of sites are way past their sell by dates: Flickr has moved in and taken over the "social" aspect which didn't exist before, and the individual sites (like Myspace etc.) much more commonly integrate image hosting.

About the only thing that Photobucket has any use for these days is for hosting eBay images for free.

Conrad