Flickr, Yahoo’s popular and successful photo sharing site, will provide Video sharing by April. Dan Farber reports on his interview with Flickr Co-Founder Stewart Butterfield, who along with his wife Caterina Fake and their staff developed Flickr several years ago as a supportive service to their game development and wound up focusing exclusively on the photo sharing capabilities. Yahoo purchased Flickr from them for a reported sum of about 20 million, which by today’s standards may make Flickr one of the greatest Web 2.0 undervaluations in history.

Video sharing in a socially networked environment is definitely on the radar screens of all the major players despite the fact nobody has figured out how to monetize it. YouTube remains the key player in the space, serving up 1 of every 3 online videos. However Flickr entry into this market may have an impact, as Flickr enthusiasts tend to represent many developers and early adopters in the online space. That said, Yahoo’s challenges in the recent launch of Yahoo Live service may indicate they’ll have trouble making a dent in YouTube’s video dominance.

Disclosure: Long on Yahoo