A few months ago, in response to Trinity Ventures’ $10.5 million investment in Photobucket, Tier 1 Research wrote that "the growth in functional hosting represents a growing threat to shared hosting providers."
Photobucket has grown rapidly since then. It had 15 million users back in May but recently passed the 30 million mark. Other functional hosting services – such as YouTube, MySpace, LinkedIn – have also enjoyed unheard of momentum (and valuations!) in traditional web hosting. In contrast, GoDaddy is just now entering the photo hosting market. I’m sorry to say that I don’t think its Online Photo Filer will *ever* reach 30 million users. It offers too little, too late.