SpyMedia launches photo bounties and a widget – stillborn in MySpace

Photo sales site SpyMedia relaunched this morning with two major new features. The San Jose company has since late last year let photographers sell their news photos to media companies or other interested buyers. Today the site has added a slideshow widget and a bounty system to let buyers offer money for photos they would like to purchase.

Here’s a heart breaker; remember when we reported several weeks ago about the new MySpace security measure that disables outbound links from Flash widgets? SpyMedia is a great example of a company investing resources in a MySpace strategy that now, on launch, is no where near as viable as it was when the idea was hatched.

The SpyStream, or widgetized slideshow, is an interesting test case. Users who display the slideshow will be able to play their photos, their friends’ photos, their designated favorites or all photos tagged as aimed at a bounty of interest.

Company President Bryan Quinn told me that there are many widget features the company had planned that are now impossible or much more difficult since MySpace has leveraged Flash9 to block outgoing links. You can’t purchase SpyMedia photos with one click from a MySpace display anymore. The company had planned to offer revenue sharing for MySpace users who display SpyMedia images. Images can no longer be flagged as inappropriate with one click, making display of all items tagged with a bounty much less appealing. SpyMedia in MySpace is now largely a one-way phenomenon.

Quinn said he felt sorry for other companies whose entire model was based on clicking back from flash widgets but that SpyMedia would use water marks and other means of letting viewers know what URL to visit on the SpyMedia site.

SpyMedia’s whole model may not be shot, but it looks like the company’s new MySpace strategy is dead on arrival today. Every startup I talk to with a MySpace widget strategy (more than I can count) admits that the new MySpace code is a problem. Most underplay it, but the ability to click back to your site is what makes a widget play make business sense. There are certainly work arounds, like adding a text link below the Flash object – but as SpyMedia demonstrates there is still a major loss of functionality.

The widget will still work on other blogs, but as Quinn told me, MySpace is the gorilla and everybody wants to be where they gorilla is. Pete Cashmore of Mashable has been working with SpyMedia and he told me that though he considers the MySpace Flash issue to be a minor problem, he also encouraged the company to make a push into as many other social media sharing sites as possible.

In ways similar to SmugMug for stock photos or the forthcoming NewsAssingment.net for news text reporting, SpyMedia is a very cool idea. Another similar site is Scoopt, which takes a 50/50 split with photographers compared to the 35% that SpyMedia takes.

Will SpyMedia’s bounties for photos be a viable strategy for a small startup? How big an impact will it make that their primary tool for entering the giant market of MySpace has had the legs kicked out from under it? Only time will tell.