Webshots Beautifiesâ€¦ Who Next?

Webshots, the online photo-sharing granddaddy, is releasing a major redesign of its site tonight. We’d thought this was happening tomorrow, but a little bird told us it was already live. The site seems to be in transition as we write…some parts updated, some parts not. Webshots, owned by CNET, has made itself prettier and easier to use, emphasizing user community aspects, while bumping up upload limits and cutting down ad spaces by 40 percent.

While others have been coy about adding video, Webshots says it will integrate short video sharing soon — but not until the fall. Webshots has 19 million unique visitors per month, with 420 million photos shared to date and 1 million new photos per day.

Big photo sites like Webshots have managed to maintain huge audiences, but it’s clear they have Flickr envy. Webshots is the most recent photo site to web 2.0-ify itself: a reborn Yahoo Photos launched to the public just two weeks ago. Along those lines, there are likely to be opportunities for photo-sharing startups to find buyers who want a pre-built user-generated photo-sharing community. So who’s likely to be acquired? Let’s work through the options.

As we see it, there have been two rounds of online photo acquisitions: first, the photo-printing sites — Kodak bought Ofoto, Hewlett-Packard bought Snapfish — then, the photo-sharing and organization tools — Yahoo bought Flickr, Google bought Picasa. Today, it seems like the latter two may have been smarter choices.

Photo-printing may be a big business, but there is too much competition to make much money off it. You can see lots of evidence of this issue in the Shutterfly IPO paperwork. Additionally, younger generations seem increasingly disinterested in printing their photos; Flickr, Zooomr, MySpace, and Facebook are the places to share your pictures.

You’d think Kodak and HP would be kicking themselves, wishing they had the foresight to buy what’s going to be hot next year. But their interest, especially HP’s, has been in selling printers and ink, so printing sites it is. Still, both companies sell cameras, so don’t count them out for another round of acquisitions.

We’ve heard Kodak is talking to Zooomr. We think other consumer electronics firms could also be likely purchasers for online photo sites. What about Canon or Sony? Circling back to Webshots — they are doing a targeted ad campaign for Casio starting in September. Since it’s already owned by CNET, Webshots might not be the most viable acquisition target, but hey, it’s already been sold (and bought) twice.

Who else?

Shutterfly, a peer to Ofoto and Snapfish that has stayed independent, reportedly shopped itself around to acquirers recently before filing to go public, but this is not the kind of startup we’re talking about. Not only is Shutterfly too big, it is too beholden to its focus on printing and other physical products. But it’s not like calling off your IPO is unheard of these days.
Facebook now hosts over 400 million photos, with members uploading 2 million per day. The company says comScore calls it the number one photo site, though we haven’t seen that list firsthand.
comScore’s competition, Hitwise, previously put Photobucket at number 1.Low-fi Photobucket takes the web 2.0 philosophy to a different level, acting as a hosting service but mainly helping members post photos and videos off-site.
Mobile photo services like ShoZu, TextAmerica
Other popular web-based offerings such as Piczo and SmugMug