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MySpace Boots Photobucket

MySpace has kicked the bucket; well, the Photobucket anyway. News Corp.'s (NYSE: NWS  ) social networking site has blocked the embedding of Photobucket videos on many of its pages, according to Photobucket.

Even though most of Photobucket's 40 million users lean on the site to post and share photographs and slideshows, the ability for users to tack ads on their videos is bumping up against MySpace's policy that prohibits third-party advertisers from placing ads on their site.

The practice of inserting ads into videos is a pretty new phenomenon. Sure, small sites in the past have often slapped on watermarks and URLs to clips -- whether they own them or not. That's a common problem on sites like MySpace and Google's (Nasdaq: GOOG  ) YouTube.

However, now that you have properties like the Eisner-backed Prom Queen series selling ads and product placement within its short-form videos, it's become a bigger issue. Oddly enough, Prom Queen -- the thriller releasing daily snippets on various video-sharing sites -- is being promoted by MySpace. That move may prompt other budding webcam storytellers to follow suit with the monetization policy.

I know what you're thinking: MySpace owns the site. It makes the rules. However, the same practice that it is condemning can just as easily creep into uploads on its own site as well as the video-sharing sites that it does allow on its site. More importantly, MySpace is a site that owes its popularity to its mostly unchecked ways. Third-party widgets and templates make the site a sometimes gaudy mess of ear and eye candy, yet that is also part of the MySpace customization that helps each user express his or her uniqueness.

If MySpace sets up too many roadblocks, it may send users scrambling to smaller social networking sites with looser shackles. It also should not underestimate the groundswell of Photobucket support. According to comScore, Photobucket recently lapped Facebook in terms of unique visitors.

I know, MySpace. You need to control the sponsored message on your turf. But you have always let your tens of millions of tenants decorate their virtual profile home pages as they see fit. Telling them now to ditch the clunky ottoman -- in this case, embedded Photobucket videos -- seems to be the wrong way to clean house.

To catch up on MySpace:

MySpace Hitches Up the Trailers
Vote MySpace in '08
MySpace's Fuzzy Future

Longtime Fool contributor Rick Munarriz went to school when social networking meant shaking a lot of hands. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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