MySpace may pick up Photobucket

By Stephen Withers
Tuesday, 08 May 2007 10:26

Strategy

Social networking site MySpace is set to acquire photo and video sharing service Photobucket according to US reports.

First reported by Valleywag and then confirmed by CNet and TechCrunch, the deal puts a $US250-300 million pricetag on the photo-sharing site. Not too shabby for a company that only expects $US25 million revenue this year, but not excessive in terms of per user acquisition costs - providing not too many Photobucket users aren't also MySpace users, and assuming MySpace can retain a good proportion of the rest.

An announcement is expected today.

Photobucket is often used to store images used on MySpace, eBay and other services. Last month, MySpace temporarily blocked Photobucket content from its pages, ostensibly because of embedded advertising. This is now thought to have been part of the negotiations between the companies.

Photobucket claims 41 million users, and according to web traffic analyst Hitwise, it takes just over 40 percent of US visits to photography web sites, but that does not take into account views of hosted content on other sites such as MySpace. Around 60 percent of Photobucket's traffic comes from MySpace.

The forthcoming closure of Yahoo Photos is likely to further boost Photobucket's position.