MySpace In Deal To Acquire Photobucket - InformationWeek
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5/8/2007
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MySpace In Deal To Acquire Photobucket

Reports put the price at somewhere between $250 million and $300 million.

Having gotten over its brief breakup with Photobucket last month, MySpace has decided to legitimize the rocky relationship with an acquisition offer.

Fox Interactive Media, a division of News Corporation, has agreed to acquire Photobucket, according to an anonymous source cited by tech industry blog Valleywag and in subsequent reports in the New York Times and Wall Street Journal.

A Fox Interactive Media spokesperson declined to comment in a way that suggests confirmation is forthcoming. "We're not commenting on these rumors right now," said corporate communications director Dan Berger in an e-mail. "As soon as we have a statement, I will pass it along."

A spokesperson for Photobucket didn't immediately respond to a request for comment.

Terms of the deal couldn't be verified but reports put the price at somewhere between $250 million and $300 million.

The deal won't result in a significant traffic increase for MySpace because there's so much user overlap between the two sites. According to Nielsen//NetRatings, Photobucket, with almost 15 million unique users in March, would add only about 2 million new unique users MySpace's audience of almost 56 million. (Photobucket claims on its site to have an audience of 41 million. Nielsen//NetRatings measures site traffic rather than registrations.)

Even so, the deal should serve to enhance News Corporation's already considerable online clout and to deter MySpace users from defecting to other social networking sites. Sites that store user files, such as Photobucket, are inherently more "sticky" than social networking sites because images files aren't as portable or disposable as profile information.

It's not clear what role MySpace's decision last month to temporarily block Photobucket widgets had on the acquisition talks, but observers have interpreted the move as an effort to remind Photobucket that it's beholden to MySpace for traffic.

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