VentureBeat

Photobucket, a Silicon Valley start-up, has quietly become the third largest video hosting site after YouTube and MySpace — reporting more than 35,000 videos uploaded every day.

Next Tuesday, it announces some extensive image and video editing tools it hopes will help keep bringing people to the site. These users can post the edited versions to any of several popular sites, such as MySpace, Faceboo or Bebo.

These Photobucket editing tools, to be announced in a partnership with Adobe (the company that makes the popular Flash technology used for video editing), could take the wind out of the sails of smaller competitors.

Photobucket will let you edit by adding captions, bubbles, frames, transitions, music, and other effects — and by dragging and dropping the resulting content to a “sceneline” (you can get a sense of the editing dashboard in screenshots below). The service goes live shortly for paying Photobucket users, and then to the other regular 35 million users in March.

Techcrunch reported on some of this earlier.

You may have heard of other video editing sites, such as Eyespot, Jumpcut (bought by Yahoo), MotionBox and MovieMasher. The average user wants to edit videos easily, and without being shut in the proverbial “walled garden.” Some of these sites let you upload a video and edit it, but can be limiting if you want to edit a video you see somewhere else.

Cuts.com, a new start-up, is trying to push things forward. It lets you grab video from any site — with help from a bookmarklet — and lets you edit it at Cuts.com. You can then post the edited version on your blog, or send it on to friends with some html code. Cuts.com plays the video from within a player (see examples here; lots of farting). Additionally, Cuts.com doesn’t change the video’s underlying code — so when you send it to a friend, they can erase your edits, accept some or all your edits, and then tweak it with their own edits, and pass it along again. You can sign up for a testing version now. This verson lets you ad captions, sound effects (farts have become popular), skipping of sections, and looping (which is where a portion of video is repeated).

Cuts.com wants eventually to let you edit full-length DVDs, and then offer the editing tools to cable companies, to add to their DVR boxes, for example to allow parental controls, says chief executive Evan Krauss.

Cuts.com is a team of five, hailing from Yahoo, Yodlee, eBay and Half.com. It has raised $800,000 from First Round Capital and other investors, most of it raised earlier this year.

It wants to make money with advertising on the site, and may try to license its software to video sites.