With the advent of image based search engines such as Google Images, there are lot many SEO advantages of image. First and foremost advantage of image hosting as far as SEO is concerned is your pages will rank better by image search engines including Yahoo Image Search, Bing Images, and Google Images.
By adding Alt Text to images, one can facilitate better understanding of the image by search engines. In addition to this you can also add file name that contains a high ranking key word that is relevant to your image. You can also use Image Captions to the image to improve dwelling time of visitors. This can certainly improve SEO by reducing bounce rates.
Image hosting is an evolving SEO technique. It will gain prominence, once search engine spiders are made to understand relevance of images. After all, SEO is all about user experience, and logically speaking, images certainly enhance browsing experience.
It should be noted that there are no well defined SEO advantages of image hosting as of now. However if you wish to walk an extra mile after doing all the basic SEO tasks such as off-page and on-page SEO, you will definitely gain an edge in search engine results with help of appropriately optimized images.
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