However, GIFs completely upended that calculation by increasing the average file size by an order of magnitude and pushed the viability of a cruft free image host further down the road by another few years.
Frankly, I'm surprised Google never just bought imgur and absorbed it under youtube or something. Being the default place on the web to host images seems like something way more strategically valuable to Google than any standalone image host.
Imgur is just a commodity. Youtube is not.
Yes, Google can create a infinite scalable image hosting overnight, but creating a community is a lot harder.
Is PBase free?
Even if you throw in some machine learning to figure out if the user's looking at memes or gifs or porn, I can't imagine the marginal value of that data being of use to Google. It's essentially unmonetizable, which is why most image hosts disappear after a few years.
Imgur was successful in avoiding that fate by pivoting to a community, but that community would be of no use to someone like Google.
Also, google has now had success building photo sites / photo products, but at the time of the youtube purchase, hadn't had much success building a video product.
So, sure, anyway halfway competent developer could bang out a YouTube (or Facebook, etc) prototype in a few weeks, but going from there to a reliable, usable service at scale is something else altogether.
You're going to need some project managers, SREs, sysadmins, front and back end web developers, programmers who know about video encoding, content experts, lawyers, etc...
So not at all unless you change what having a monopoly is.
They did make their own version of youtube at one point, apparently it wasn't enough and they wanted the userbase too.
"The acquisition of the privately held YouTube will enable Google to thrive in one area of the Internet where it has so far failed to gain footing. According to Hitwise, which monitors Web traffic, [YouTube] has the lion's share of online video traffic (...) a 46 percent share, MySpace has 23 percent and Google Video has 10 percent."
Meanwhile, this 2006 article from the Economist  stated:
"the deal is 'an aggressive, mature move for Google, one that shows that senior management is not too proud or stubborn to see that they can't build everything themselves,' says Henry Blodget, an analyst at Cherry Hill Research. Indeed, Google's Mr Schmidt freely conceded that YouTube is the 'clear winner', especially in creating social networks around its site."
Google had very much the power of building a YouTube-like community themselves, but buying out a competitor is a short-cut since it has the positive side-effect of removing that competition in our business. After buying YouTube, Google didn't have to waste time in building a community around a new product or "converting" the YouTube masses to theirs.
This short-cut way of acquisition is nowadays preferred by large companies rather than risk everything by doing innovation and "real" competition.
Summary: userbase/community was what drove the network effect, which made it impossible for Google to catch up, and that's why Google made the decision to purchase Youtube.
Video hosting + community is a commodity.
Image hosting + community is a commodity.
Just scroll down on this page: http://imgur.com/gallery/tWWxi4D
Voting options, and lots and lots of comments.
The whole point of this discussion thread is that Imgur is f*ed because they aren't independent enough. Otherwise there's nothing to worry about, right?
Non-monopoly is a commodity.
I wanna see the entire game 7 of the nba finals online. Show me where besides YouTube.
I wanna see the Red Wedding scene again. Show me where besides YouTube.
I wanna find a quick entertaining video to show my kid. Show me where besides YouTube.
I wanna find a compilation of the longest homeruns in baseball history. Show me where besides YouTube.
Heck most people try to ignore YouTube comments. It's not really a community at all. The actual content is the value prop.
Youtube isn't a commodity. It's the place that even your aunt, mother, grandmother, uncle will visit and knows to visit for entertainment or music. People who would never have a reason to visit imgur.
Sex. Corporations tend to keep faaar away from everything related to porn, and a fair share of imgur images is nsfw content. Cleaning it up would be more trouble than it's worth.
It is by many considered better than purpose built porn search sites, such as pornmd.
Yahoo's purchase of Tumblr and many bids for SnapChat seem to be evidence to the contrary. Cable companies and premium channels also make a lot off of porn.
Porn is fine for large companies as long as they have some cover (the product isn't just porn).
No kidding. The whole front page is all animated GIFs (or .gifv/mp4/whatever
As it is:
1. I hate gifs (with very few exceptions).
2. I lack a decent place to host images associated with Reddit.
3. Subscription-based services are a risk on several fronts.