The big controversy online began two nights ago when MySpace blocked its users from posting videos from Photobucket, a photo and video sharing site. MySpace users used to be able to paste a Photobucket widget into their MySpace page to show off videos they’ve created and uploaded to Photobucket. The social networking juggernaut claims that Photobucket violated MySpace’s terms of service by allowing advertisements to play in user’s videos.
MySpace has an install base north of 100 million users and Photobucket has more than 40 million users currently uploading 50,000 videos every day. And as you can imagine there are many unhappy people.
Some believe this was done to put a thorn in the side of Photobucket’s current acquisition talks. There’s no question that lack of access to MySpace will be a major hit to revenue. Currently, only 50% of Photobucket’s revenue comes from ads seen on the Photobucket site. The other half comes from ads on sites where users have embedded the Photobucket code to show off their pictures and videos.
NOTE: Photobucket pictures can still be shown on MySpace. This ban only affects Photobucket videos.
While this may hurt Photobucket, this could severely hurt MySpace. Social networking users are extremely finicky. You remember the popularity of Friendster? While MySpace has the volume of users they could all leave tomorrow making that multi-million dollar site completely worthless. All it takes is a strong controversy or a threat to make people leave in mass. It’s possible this could be the one.
For all those angry users out there you have to remember one thing. When you get something for free, social networking or video sharing, you rarely get to have everything you want.
