MySpace buys Photobucket for $250 million

9 May, 2007

MySpace, the social networking portal, has bought out photo-sharing website Photobucket for around $250 million in cash.

According to an industry report, the buy out would represent an about-face between Photobucket and MySpace, when just last month the two companies crossed swords in a very public battle. It may be recalled that MySpace had accused Photobucket of violating its terms of agreement by encouraging users to include advertisements in the slide shows they posted to MySpace and began blocking Photobucket’s photo slide shows and videos. The fight later ended up with both sides agreeing to strengthen lines of communication, the report added.

Significantly, some analysts had predicted that the move by MySpace might be a step toward acquisition of the photo-sharing site. It was as if MySpace was trying to pull down Photobucket’s price by dramatically illustrating how much the photo-sharing website relied on MySpace for traffic. Reports quoting sources said MySpace has agreed to pay $250 million for Photobucket, plus as much as $50 million more if certain performance targets are met.

For MySpace, a deal with Photobucket would be the second acquisition under Peter Levinsohn, the president of Fox Interactive Media, who took over the News Corp. unit in December. Mr. Levinsohn has said that he is willing to go shopping for companies that enhance users’ experiences or help monetize MySpace.