Yfrog is the second-biggest source of uploaded photos on Twitter (and closing in on the number one spot fast). But how are they raking in the cash? By focusing their ad campaigns on their most popular users – celebrities.

Yfrog Has Estimated Annual Revenues Of $10m. How Do They Make Their Money?“If you look at the hundred users on Twitter that have most followers, they have a lot of followers. And usually they are very very famous. They could be sports superstars, movie stars, whatever. If a person like this posts a picture and a lot of their fans come to look at it, those fans are in a very specific demographic. Nike may want to advertise next to Tiger Woods. People who have special interests come in masses to our sites. It’s not the same as a bunch of noise.”

I always notice the Twitter three (Biz Stone, Jack Dorsey and Evan Williams) using Yfrog to share their pictures on Twitter – never Twitpic. Which makes me wonder if they have some kind of special arrangement in place.

And if they don’t, then maybe they should.

(Source: SAI.)