SmugMug has released a set of new features that further cements itself as a first-rate photo sharing website.

The first of these constitutes just a user interface upgrade, but a very attractive one at that. SmugMug realizes that users often change the size of their browser windows – and switch between devices with differently sized screens – so it has implemented dynamic resizing of photos, a feature it’s calling “SmugMungous”.

Change the size of your browser window and the photo that you are viewing will automatically get bigger or smaller while preserving its quality and resolution. The rest of the page’s interface will accommodate the new size as well, with thumbnails appearing or disappearing dynamically to fill the additional or remaining space. SmugMug’s not only about photos, though; videos hosted by the service will now also resize automatically in response to changes in the browser’s window size.

There are a few other new features related to video in particular. High definition video encoded in H.264 and with a maximum size of 1280×720 can now be uploaded to and played through SmugMug using Quicktime (and, soon, Flash). When you upload high resolution video, it will automatically be encoded in a variety of sizes (”Web”, “iPod/DVD”, and “HiDef”) so you can play it back in a variety of settings.

Video collections that you share publicly can now be exported to iTunes as podcasts so that family members and friends can watch up-to-date videos on their computers and play them on their Apple handhelds. And finally, SmugMug’s iPhone interface now supports video so you can browse and play videos through Quicktime on your phone.

SmugMug, a family-run business that will celebrate its fifth year anniversary this Friday, says it has over 450,000 paying customers and makes over $10M in revenue per year. There are no free accounts on SmugMug; users must pay a minimum of $40 per year, but they have access to unlimited storage and bandwidth. The company has yet to take any outside money, and seeing how well things are going, probably won’t.

Update: We’ve embedded Robert Scoble’s video coverage of SmugMug and this announcement below. Footage of the actual release doesn’t start until around the 12-minute mark.

SmugMug CEO Don MacAskill, who has said “maybe I just don’t get this ‘Web 2.0′ term” in the past, is proceeding to teach those of us who claim to know exactly what it means a thing or two. The company launched a suite of stunning new features tonight.

SmugMug, which took its first customers in late 2002, is the go-to service for serious photography nuts. 100,000 paying customers have uploaded over 100 million photos. The company has 19 employees, is profitable, and has never taken outside funding. Revenues are in the $10 million per year range, MacAskill tells me.

There is no free version of the service. People pay a minimum of $40 per year to upload photos to the site. Pro accounts, which are $150/year, give photographers a number of tools to add watermarks, and sell downloads as well as prints of their work. The higher level accounts also allow customers to use templates, fully customize the look and feel of their albums (or “galleries” as SmugMug calls them), and even use their own domain names.

The site has most of the sharing and community features of the prototypical Web 2.0 company, Flickr. RSS feeds, tags, comments, a public API, etc. Yahoo, Flickr’s parent company, meets with the SmugMug team regularly and the Yahoo user interface team has recently sung the praises of SmugMug on a Yahoo blog. For many (but not all) serious photographers, SmugMug is simply a more powerful way to show their photos.

SmugMug has also become the poster child for Amazon’s S3 storage service, famously claiming to save at least $500,000 per year by switching.

New SmugMug Features

SmugMug launched a number of new features and architectural changes tonight that come close to constituting a complete relaunch – 95% of SmugMug’s page views are affected.

The key change is the complete re-writing of the photo viewing interface from HTML (with some Ajax components bolted on) to dynamic javascript. Clicking among pictures no longer requires a page refresh at all, speeding site navigation significantly and not bringing people back up to the top of the page after clicking on a new photo.

And like Yahoo Maps, SmugMug has gone through the painstaking process of updating URLs as people navigate the site. This is a problem that plagues Rich Internet Applications. Without a page refresh when navigating a Flash or Ajax application, the URL doesn’t update. SmugMug has solved that problem, even for Safari (which Yahoo still hasn’t solved).

SmugMug has also moved user comments to the same page as the photo (saving a click), and moved most of the metadata and photo options from the display area into a fly-out drawer. The effect is to highlight the photo content, but not clutter the page with lots of data and links.

SmugMug’s Future

MacAskill says he’s approached “constantly” by venture capitalists and potential acquirors. But his plan is to keep running the profitable company without outside interference. He wants to keep providing the best product for professional photographers, he says, and has no plans to sell out. That, of course, will just make those VCs and suitors want SmugMug even more.

Is SmugMug a “Web 2.0″ company? Yes, in almost every way…but you won’t hear MacAskill admit it. Not anytime soon, anyway.

Flickr wasn’t the first photo sharing site, and it isn’t the most popular. In fact, it isn’t even the most popular photo sharing site owned by Yahoo – this is. But Flickr caught our attention and, at least with the technology-savvy crowd, it has become synonymous with photo sharing.

A whole new crop of services are gunning for flickr and the title of “coolest photo site”. I call these the “Flickr Gunners” and I’ve written about them often. Yahoo Photos and Webshots, two newly rejuvenated services, are also combining new and exciting features with their massive existing customer and photo base.

Photo sharing sites are sticky by nature. Once you’ve gone to the trouble of uploading your photos, tagging them and creating albums, it’ll take something very special to get you to move. Flickr had this “specialness” – the social tagging and viewing features built a network effect that made flickr more valuable to a new user as it grew.

But Flickr has weaknesses. First, as I said they are not the biggest photo site. Yahoo Photos, Webshots and others dwarf them both in terms of users and uploaded photos. These larger services can afford to wait and see what works best and then duplicate it (and Yahoo Photos is rolling out new stuff that isn’t available on Flickr. Second, flickr hasn’t done much in terms of new features lately. They missed the video boat entirely, and YouTube now has a big lead in that category. And third, there are a number of UI issues that could easily be fixed but remain unchanged, stubbornly: the need for sub albums, better batch editing features and the ability to view more photos on a page. Yes, flickr has been working hard on scalability issues, but that shouldn’t stop them from evolving the UI and feature set.

And brand new or very young services are rolling out new features regularly. These small companies are hungry and obsessive and will do anything for market share. Here are three I’ve been tracking:

BubbleShare

I really like BubbleShare. As I’ve written before, it takes about 10 seconds from hitting the site for the first time to actually viewing pictures that you’ve uploaded. You don’t even need to create an account.

BubbleShare has added new features often since launch. Recent upgrades include Audio Caption, BubbleBar (a way to bring photos right to your desktop, similar to Slide or FilmLoop) and the less serious but really fun BubbleCaptions, (where you can add cartoon text captions to photos).

BubbleShare’s big weakness is that they do not allow tagging of photos, or photo search. This service isn’t about discovery, it’s about sharing photos and albums you’ve uploaded/created with others.

Ookles

Ookles is Scott Johnson’s (Feedster Founder) newest venture, and my expectations are very high for this yet to be launched photo service.

There aren’t many details yet, but Scott has described Ookles as Flickr+Riya+YouTube (click on the Zooomrtations on the bottom right sidebar). In a recent podcast with Gregory Galant, Scott called Ookles the “next gen Flickr” targeted to people with children. He stressed that both the front and back ends will be compelling – a “beautiful UI with everything Ajax”, and an intelligent, scalable back end. He also disclosed that the company has gotten to launch stage on just $75,000 in funding.

The hype machine is on. Scott, you have our attention. Please deliver.

Zooomr

Zooomr came out of nowhere a few weeks ago and suddenly 17 year old founder Kristopher Tate is the coolest guy at the party. Zooomr 2.0 is coming out next week and includes new features like “inspector” (a quick view of photo details), “smartsets” (dynamically generated albums based on rules, such as certain tags, dates, people, etc. – Yahoo Photos is doing something similar), geotagging improvements and more.

Kristopher is listening to his users, too, and adding features quickly, sometimes real time. Read Thomas Hawk’s post about how he recommended that Kristopher add trackbacks to photos and it was up within an hour.

Keep an eye on Zooomr – my bet is that it gets acquired quickly, if only so that one of the big players can get their hands on Kristopher. My original profile on Zooomr is here.