PhotoBucket is following in Flickr' s footsteps:

"Digital media hosting site Photobucket raised a $10.5-million second round of funding Monday, primarily from Trinity Ventures.

The Palo Alto, California-based company is a rare find among young Internet startups. It is both profitable and popular outside of a select group of in-the-know digerati.

Photobucket has more than 16 million members and is growing by 2 million members per month. The free site gives users 1 gigabyte of space as well as easy access to publishing on sites such as eBay, MySpace, Blogger, and Neopets.

The site added video services in April and now serves over 50 billion image and video requests by other sites each month.

....

"At the rate of their growth, we could picture them doubling very quickly," said Gus Tai, general partner at Trinity Ventures and a recent addition to the Photobucket board. "This company has a lot of upside."

Though Photobucket has greatly benefited from the current jumble of online social networks and other places to post photos, Mr. Tai contended that young people will continue to want their digital media on many sites, even as the market evolves.

"It's very clear to me that at least for that cohort, they will want to have multiple forms of expression," he said."

It amazes me how Photobucket is able to be profitable with the massive server traffic and the minimal CPC ads revenue - what do I miss here?