Yahoo went public with their newest service today called PhotoMail
According to SiliconBeat:
Instead of emailing the actual photos, PhotoMail inserts small thumbnails of the photos in the body of the email messages, and uploads the full-size images to the Yahoo Photos album service. Recipients get formatted email messages with thumbnails that link to the full-size images. When they click on an image they want to view, they’re taken to a temporary online album that Yahoo has automatically created.