For those who want to follow along live, you can find the video of the event here.

First up, restaurant recommendation service UrbanSpoon, which was recently bought by IAC. Some highlights of their slide:

• Of their visitors on the web, 74% come from Google.
• Of their visitors through mobile devices, 99% come through the iPhone (they have one of the more popular apps).
• They’re seeing more than double the revenue off of those mobile users versus web users.
• When they were featured in an iPhone commercial, they saw 300% growth.

Next up, online imaging editing service, Picnik (which has a partnership with Yahoo to edit Flickr pictures).

• 80% of their revenues come from paid subscriptions, the other 20% from advertising.
• About half of their subscribers do so on the first visit to the site, 75% of those do within 4 visits.
• “Partnerships are not nirvana” — obviously a shot at Yahoo.

Video slideshow maker Animoto (which recently raised a new round of funding):

• They have 700 paid users per 100,000 users, but are already cash-flow positive with that.
• They say their hybrid model (freemium + virtual goods) is working

And finally, online real estate company, Redfin:

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Starting today, that list includes other tools like online payment handling platform PayPal, basic photo editor Picnik, Xoopit service MyPhotos and file sharing application Zumo Drive. If you already have access to the applications Yahoo brought to Yahoo Mail back in December, you’ll notice several of the apps the next time you log in, located along the left side of your inbox.

Thanks to the integration, Yahoo mail users get access to a number of useful services without the need to leave the communication interface. That way, Yahoo intends to increase the stickiness of one of its core products, in a relative, open-minded way. After all, users now don’t need to leave the interface to e.g. crop photos, transfer money, share large attachments with others, and so on, and Yahoo is not restricting itself to using or building proprietary tools.

Gmail, your turn.

In related news, Yahoo is also adding a good number of OpenSocial applications to MyYahoo today.

More on today’s Yahoo Mail announcements in this quirky video:

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When I was looking at traffic numbers for the top photo sites this weekend, another stat caught my eye. Online photo editing site Picnik is also quickly climbing the ranks of photo sites from seemingly nowhere.

In January, according to comScore, the site attracted 6.6 million unique visitors worldwide, a tenfold increase from the year before. On comScore’s list of the largest photo sites, Picnik ranks No. 14, above Shutterfly and AOL Pictures, and just below Snapfish. Unlike those services, however, Picnik is not really a place people store their photos. Rather, it is a place where they touch them up and manipulate them before they post them on MySpace, Facebook, Flickr, Smugmug, or somewhere else.

Picnik is a powerful, cloud-based photo editor that is integrated directly into Flickr, SmugMug and other photo repositories. Competing online photo editors such as Fotoflexer and Photoshop.com (formerly and Photoshop Express) attract only a fraction as many users (1.4 million uniques for Fotoflexer and 760,000 for Photoshop.com.

I asked CEO Jonathon Sposato for more details. He offered that 45 million photos were uploaded in January, and that 45 percent of Picnik’s traffic is direct, 28 percent comes from search engine, and that only 18 percent comes from partner sites such as Flickr and Smugmug. Picnik offers a base version of its photo editor for free, and then tries to convert power users into paying a subscription for more features. While Sposato won’t get into the conversion rate of free to paid members, he says that the percentage is increasing, renewals are increasing as a percentage, and he says that Picnik is now cashflow positive, a little more than two years after launch.

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As I alluded to in an earlier post, online photo-editing applications keep getting better as the competition heats up between startups like Picnik and FotoFlexer. Today, a very large competitor, Adobe, is entering the market by releasing a Web-based version of Photoshop for editing pictures called Photoshop Express. It is in public beta and anyone can sign up.

Photoshop Express is by no means just Photoshop ported onto the web. It would even be a stretch to say it’s a stripped down version of the desktop software, since it’s intended for mainstream consumers, not professionals.

This distinction shows in both what it lacks and what it offers. There are only 17 editing features in Photoshop Express: a tiny fraction of those available with the $650 desktop software. And all of these 17 features are filters intended for tuning and effects – you won’t find any tools for drawing lines, adding text, or creating shapes. What you can do is easily take out red eye, touch up undesirable areas, change saturation, pop color, and crop (among other things).

One of the most innovative features in Photoshop Express is the ability to revert any filter you apply to a photograph. You can do this to a particular filter regardless of whether you’ve made other changes to the photo since applying it. All you have to do is uncheck the particular filter and it will be subtracted from your changes, which are represented in a historical filmstrip with all versions of the photo you have gone through. This undo functionality for particular changes partly makes up for the unfortunate absence of layers, which are so vitally important in the desktop version of Photoshop.

Photoshop Express also differs from its desktop cousin by serving as an online storage and photo sharing service. You can upload up to 2GB of photos to the web app (or pull them in directly from Facebook, Photobucket, or Picassa). They are arranged in a collection that can be made available to others or kept private. Embedding and slideshow functionality is also available.

Adobe has other motivations behind this launch: Doug Mack, the vice president in charge of Photoshop Express, says:

It is a showcase of what is the best that can be done with Flex and Flash. Hopefully, it will inspire other developers. We are also setting up a hosted services platform that we can expand to other products.

So this is just the beginning for Adobe. Should smaller fry like Picnik be scared now that Adobe is, uh, flexing its muscles online? Picnik CEO Jonathan Sposato isn’t too worried. He gives me the classic Innovator’s Dilemma argument:

We don’t envy the challenge Adobe is facing—they have to deal with not cannibalizing a highly successful finished-goods business. Adobe has a business to protect, while Picnik has a business to build.

Okay, but what about Adobe’s massive distribution through its existing products (Flash, Photoshop, Illustrator, etc.). Sposato’s got an answer for that one as well:

Sure, I think their distribution is a great strength for them. And there’s definitely a Windows vs. Mac analogy here. But i think today’s internet is so incredibly efficient that traditional models of distribution may matter less and less. The cost of switching apps for most users is just so easy. They can find new things really fast and try them out.

Hopefully, I am not smoking crack but I do think the marketplace is so efficient that we can compete based ultimately on quality and ‘winsomeness’ of the product (to use a very old fashion word).

No Jonathan, you’re not smoking crack. May the most winsome product win.

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And the Webtop photo editors just keep getting better. Today, FotoFlexer released a completely revamped user interface, making it simpler and more intuitive. FotoFlexer also added a bunch of effects, such as the ability to type directly onto a photo, add animations, and choose from more frames. Once you finish tweaking your photos, they can be posted all over the Web (Photobucket, Facebook, Flickr, SmugMug, etc.)

I made the image above in about 30 seconds. (You can play with it here). The tabbed UI is really easy to use, and there seems to be a lot of effects and layers that you can add. I am not so crazy about the animations, but I think those are supposed to appeal more to young girls. All in all, though, the functionality that is available for a Webtop app is pretty impressive and the new features and functionality should make it much more competitive with Picnik. Which one you use now is really just a matter of personal preference. (FotoFlexer is more tightly integrated with Photobucket, Picnik is baked into Flickr). I like Picnik. Mike prefers FotoFlexer. But as the traffic graph below shows, more people agree with me.

The fact is that FotoFlexer is getting trounced by Picnik. According to comScore, FotoFlexer only had 396,000 unique visitors worldwide in February, compared to 966,000 for Picnik. This new UI could help it turn things around. And just in time too, because a big new entrant to the Webtop photo-editing game is debuting tomorrow (more on that later).

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Tools now available to all users include advanced edit tools, special effects, additional fonts and shapes. The service will be ad supported, but those wanting an ad free experience can sign up for Picnik Premium for $24.95 a year.

Why the change? This is how Picnik spins it:

We want to make everyone feel like a photo editing superstar. Picnik is already the world’s leading online photo editor, but there are still a lot of people living tragic, gloomy lives believing that powerful photo editing tools cost hundreds of dollars, come in unopenable boxes, and are impossible to use. By offering an ad-supported version of Picnik, we can make much richer, deeper, and ultimately better photo-editing functionality available to more people around the globe: Photo editing awesomeness for everyone.

The more likely reason: they can afford to do so due to the money they’re getting from Yahoo for the Flickr deal, and in the face of increased competition (both existing and future) Picnik needed to offer more. Still, Picnik was a good package before this announcement, and now it’s better again.

See our February 2007 review of online Photo editing sites here.

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Currently, you can rotate photos on Flickr, but the editing stops there. When the new tools launch, users will be able to edit photos more extensively using the Picnik Flash based tools (see our review here).

The deal has been signed and implementation will occur sometime in the next few months, Flickr told me yesterday. Users will be presented with an edit option on the photo page. Clicking it takes the user to a new Flickr photo edit page, with the Picnik tools integrated via an iframe. After editing, users can add the edited photo to their Flickr account or, if they are a Flickr pro user, overwrite the original.

Business terms around the deal are not being disclosed at this time. Picnik is self funded to date.

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The site first launched in July with basic functionality and integration with Facebook. This last week they relaunched a new site with more tools, direct access to your desktop/laptop webcam, and they also now integrate with Flickr, Picasa and MySpace.

Upload a photo, or grab one from a supported service, and edit it by changing colors, adding effects, bulging or pinching areas (to make body parts look larger or smaller), etc. You can also turn any image into a sketch or cartoon. I spent about 10 minutes creating the different versions of the picture to the right (original is top left). The most fun is changing hair color, although the image third down on the left is my personal favorite.

Fotoflexer says they incorporate their own artificial intelligence algorithm to figure out the right way to alter images. And whatever it is they’re doing, it works. You simply point out a few areas of the site you want to remove or alter and it figures out the rest of the pixels pretty quickly. You can do all of this in Photoshop, but it takes a lot longer. And unlike most (but not all) of the online photo editing tools we’ve previously covered, FotoFlexer also supports layering for more complicated image editing.

FotoFlexer also now integrates directly to your webcam and to take a quick snapshot and edit it. Many of the effects are similar to the Photo Booth application that comes installed on all Macs.

The integration with third party services is a great feature as well. Pull down photos from Facebook or another service, alter them and re-upload in a few minutes.

The service runs in Flash and was built on the Flex platform with mostly custom tools. The company has not raised any capital and has 15 employees, all in the Silicon Valley/Bay area. About 50,000 people use their Facebook application and/or the website directly. I expect that number to grow as social networkers discover the joy of turning their pictures into cartoons, or turning their hair color to Fuchsia.

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Seattle based Picnik has grown an audience without gaining much attention. We previously covered the site in February as part of an overall market review. Facebook’s F8, the Facebook as a Platform service is going to change market awareness of Picnik, Picnik being an early content provider to Facebook’s millions of users.

Picnik is a user friendly service. It’s avoids the cutting edge, youth market focus of sites such as Flektor, instead delivering what can best be described as a web based version of Picasa aimed directly at the mature end of the market. Moms and Dads, to Generation X users who are tired of the trendy graffiti style “hip” focus of other services will love Picnik.

Picnik is quick, clean, easy to use and comes complete with built in support for Flickr, Picassa Albums and Facebook albums. Registration isn’t required to use Picnik. It simply works, and works well.

Since F8’s launch last week, Picnik has added an additional 50,000 users and according to co-founder Mike Harrington is now the third most popular service in this space behind Flektor and iLike. The site remains in independent ownership but with this level of functionality is bound to be an acquisition target in the future. Give Picnik a try then imagine Picnik’s photo editing functions natively in Flickr; I’d like to see that!

(image via Blake Burris)

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Since all computers come with basic software that rotates, resizes and crops photos, there needs to be a compelling reason to use an online service. Uploading a photo to such a service, editing it and then downloading it back to your hard drive too high of a cost. To compensate for this, most services allow you to transfer the edited photos directly to Flickr, Webshots or other online photo services, saving users the trouble of making round trips uploading and downloading.

Most of these online services also offer editing tools that go beyond simple rotation, resizing and cropping and start to creep into Photoshop territory. Here’s a few of the better ones, along with our most recent testing notes:

Fauxto

Fauxto is a Flash-based Photoshop look-alike. It is the only layer-based online tool that we know of, and is by far the best of the bunch. But if all you are looking for is photo editing, and you aren’t familiar with Photoshop, Fauxto will frustrate you with its complexity. And if you are already familiar with Photoshop, chances are you have a copy already. Fauxto is lovely to look at and it is a really nice example of Flash in action, but I’m not sure who their target market is.

Picnik

Picnik is the new kid on the block, and they’re the best so far. It is also Flash based, it is the fastest of the bunch and the user interface is the most intuitive. Once you are done editing, you can transfer your photos directly to Flickr. Picnik has replaced Ajax-based PXN8 as our favorite online photo editing tool.

Picture2Life

Picture2life is an Ajax based photo editor. It’s focused on grabbing and editing images that are already online. The tool selection is average, and the user interface is poor. There are some bugs on the site. Photos can be transferred to Flickr, 23 and Imageshack after editing.

Preloadr

Preloadr is a Flickr-specific tool that uses the Flickr API, even for account sign-in. The service includes basic cropping, sharpening, color correction and other tools to enhance images. The fact that Preloadr is designed specifically to work with Flickr may not be an advantage – some of the other services are just as good or better and also offer Flickr integration.

PXN8

PXN8 is the best of the Ajax based editors (and the best overall until Picnik launched) and has a great user interface with the main features highlighted on large icons. The basic “enhance” feature does a very good job of fixing the obvious problems with pictures. Edited photos can be transferred to Flickr or Webshots’ AllYouCanUpload service.

Snipshot

Snipshot, previously called Pixoh, is another very-good Ajax-based editing tool that stands out because of its above average design and the fact that they have an API into their service. We prefer the features and UI of PXN8, but just barely.

Read FranticIndustries for their take as well.

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