Why Photobucket Failed Instagram

By on November 14, 2016




Photobucket is an image and video hosting website founded in Denver, Colorado in 2003 by Alex Welch and Darren Crystal. According to Crunchbase, the company received its initial VC (Venture Capital) funding from Menlo Park, California based Trinity Ventures. In an era where broadband was truly sharpening its claws and social media websites were moving internet traffic at an astounding pace Photobucket made a name for itself by attaching itself to these social media websites.

Social Media
While Friendster and Hi5 were trying to make a name for themselves Myspace quickly became the giant in the room dominating social media supremacy and Photobucket went along for the ride. in 2004 users would upload images to Photobucket and attached the URL to their Myspace pages. The process was tedious and the user interface couldn’t be any worse. As primitive as Photobucket was, its competitors consisted of Picasa, Flickr, and Snapfish which were all flawed in their own right.

In May of 2007 Photobucket was purchased by Fox Interactive Media (News Corp) for an estimated $300 Million. Fox had been on a media buying streak with it’s $550 million purchase of Myspace in July 2005 and its $15 million purchase of image editing site Flektor in 2007.

Bugs, hackers, and more bugs
That seemed to be the norm for Myspace as well as Photobucket. While Myspace enjoyed a stint of being the most visited website in the United States users were getting fed up with having their accounts hacked and its slow processing speed. Photobucket users mirrored those same concerns. Despite its millions of registered users, News Corp didn’t seem interested in spending the money to make Photobucket a next-level image and video hosting/editing website.



The Facebook Movement
was the beginning of the Myspace decline. Facebook’s bug free interface was lightyears ahead of the competition. In a 2012 article Forbes noted that Facebook’s strict image controls, unlike its Myspace counterpart which allowed music and high resolution images to bog down page surfing speeds.

Along Come the Apps
, particularly Instagram (in 2010) became the preferred image hosting app and website for millennials. Celebrities and media icons flocked to instagram, the Kodak Instamatic filtering options were a hit with young people and Facebook recognized phenomena. The company made a bid and purchased Instagram in April of 2012 for an estimated $1 billion in cash and stock.