First the bad news. ProtectMyPhotos, which launched in October 2006, is done. They spent $280,000 in seed capital to try to make the idea work, but ultimately they couldn’t compete new backup services like Mozy and Carbonite. Mozy was recently acquired by EMC for $76 million, and Carbonite has raised $21 million in capital.

We’re therefore putting ProtectMyPhotos into the TechCrunch DeadPool.

But Shaw also writes to tell us that his second startup, DocSyncer, is going gangbusters. The product auto-syncs word documents on your hard drive with Google Docs. In the last five days, he says, users have auto-uploaded more than 200,000 new documents to Google Docs via the product, making DocSyncer by far the largest single contributor to Google Docs. The product appears to have legs.

There’s still no guarantee that DocSyncer will make it as a business, but users like the product. That’s a good start, and now Shaw can focus all of his energy on making it work.

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ProtectMyPhotos is a privately funded Boulder, Colorado company led by Cliff Shaw, the man behind Pearl Street Software, makers of Family Tree Legends. Shaw said that his work in the genealogy space demonstrated that easy online photo storage is what’s in the largest demand by consumers. ProtectMyPhotos has an experienced team strong in building retail partnerships. That’s going to be very important as there is no shortage of competitors in online photo storage.

ProtectMyPhotos scores high in ease of use. The client displays online storage in a way that looks just like the desktop, complete with hierarchical folders and typical metadata. It can autodiscover particular folders on your computer that contain media files or can be directed to sync with particular folders on the desktop. Photos can be taken offline and edited, changes will automatically be made online and all previous versions are stored. The company seeks to offer the easiest program for mainstream users to adopt. They’ve done a good job of it.

Multiple users can be given permission to access accounts and photos and changes can be synced automatically with Flickr accounts. ProtectMyPhotos is currently working on an API that it will provide to other services seeking to automatically sync desktop and online files. They believe this will be key in furthering mainstream adoption of web services and I think they are right. Whether it’s Google Office, Zoho or the company that stole the show at Office 2.0, Joyent, the prospect of ProtectMyPhotos sharing with others the capability to sync files online and off is an interesting one.

The file backup service costs $40 per year for 40 GB per year with additional space available at the same price. That space can be used to backup and sync any type of file, the company is emphasizing photo backup only because it believes that’s where the market is.

Venture funded Carbonite (our review) offers similar services at a similar basic price point but without storage limits. See also MyFabrik’s interesting local storage partnership with Maxtor, extensive online UI but more expensive service. There’s also Earthlink’s WebLife, and StashSpace for similar functionality with video storage and editing. StreamLoad is one of the most interesting players in this vertical, offering large amounts of storage space for free or dirt cheap. Those are just a few of the most recent entries, there are quite a few others as well. Zoho lovers can look forward to the forthcoming ZohoDrive.

ProtectMyPhotos believes their service will stand apart in ease of use, distribution channels and perhaps API fueled partnerships. There should be no shortage of consumer demand in coming years for automatic backup, but it’s only a matter of time until Google, Microsoft, AOL and everyone else gets into this game in a serious way. AOL already has. ProtectMyPhotos sees itself as a logical acquisition target. That could make sense, or the company could be viable if a market for small independent media storage services continues to emerge.

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