yFrog's Parent ImageShack Is Growing Fast, Dreaming Big

yfrog screengrab imageshack

If Twitter is looking for additional sources of revenue, it should take a look at photo hosting.

Last week we learned TwitPic earns 70% profit margins on $1.5 million to $2 million in sales annually.

After reading about TwitPic, we asked ImageShack’s CEO, Jack Levin, how his business is doing. ImageShack is the parent of yFrog, a TwitPic-rival, launched in April 2009.

Levin declined to give us yFrog-specific revenue numbers, but he said yFrog paid for itself in its first month. Jack says ImageShack does 500 million pageviews per month; yFrog is about 10-15% of that. ImageShack has 60 million monthly unique visitors worldwide, says Jack, up from 20 million just a year and half ago.

In total, Jack says some days ImageShack has $10,000 in revenue, other days it is $50,000. That implies a wide range of $3.65 million to $18.25 million annually. Splitting that down the middle, revenue could be approaching $10 million per year.

While the company is bringing in money, Jack says the focus is growth. He is considering taking ads off yFrog to “remove the friction between the users and the product,” and gain new users. ImageShack is a big “mothership,” so Jack can “take risks with yFrog.”

“Monetization is not our number one priority. It’s unlikely we will IPO or sell anytime soon.” So, Jack wants to make the company huge, and he dreams of a “One billion to two billion valuation” when the market gets back on its feet.

To reach a value of $1-$2 billion, Jack needs more users. From there he can build an ad platform with ImageShack, a lucrative image search business and sell ads around photos that are uploaded.

The company has raised two rounds of funding: A $1 million round from Index Ventures, and a $10 million round from Sequoia. Jack says ImageShack didn’t need the money, but wanted partners.

The company has 16 employees in total, with two developers focused on yFrog.

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