Myspace has been a source of traffic for various social start ups such as Photobucket, Slide and even Youtube. The video sharing site gained millions of visitors from their embeded videos on Myspace’s user profiles. If you look at virtually any Web 2.0 application, whether it’s Flickr, whether it’s Photobucket or any of the next-generation Web applications, almost all of them are really driven off the back of MySpace.

The most recent high profile ‘ban’ is Photobucket, the image hosting site that has turned itself into a social community on the back of the wave of Web 2.0 buzzz. News.com reports

Social-networking giant MySpace.com on Wednesday blocked Photobucket videos and photo slideshows from being uploaded to its pages.

MySpace will no longer let users post such content from Photobucket in their profiles, blogs or comments section. MySpace said Photobucket had violated MySpace’s terms by encouraging users to post advertisements–specifically to an ad campaign for the upcoming feature film Spider-Man 3–in their videos. MySpace forbids third-party vendors from advertising on its site.

We spoke to the company about their actions, but they refused to respect our community’s terms,” MySpace said in a statement. “We had no choice but to disable their service.”

Myspace published their third party terms of service recently which in one point stated no third party widget or video provider can sell adspace through their network. This resulted in many start ups being blocked by the social gaint and in some cases resulting in the fall of that busines. Stick to their rules, after all its their traffic, and find other ways to monetize your service.

Traffic Gain:

How Photobucket stacks up against the other social powers. Note Youtube’s growth in the last year, thank you Myspace.