MySpace buys Photobucket

First reported by Valleywag, and then confirmed by TechCrunch, MySpace has acquired the popular photosharing site, Photobucket. Readers of this blog will know that the two companies have had an on/off relationship, with Photobucket owing much of its success to News Corp.'s social networking site, before they were blocked for breaking its terms of service. After a stand off which lasted nearly two weeks that involved a fair bit of MySpace bashing, Photobucket suddenly announced that the two had kissed and made up -- leading many to speculate on what had motivated the u-turn. Now it appears that two have been in acquisition talks ever since.

From Valleywag:

Like a squabbling couple finally realizing they can't live without eachother -- or a parasite fusing with its host -- Photobucket has concluded terms of a sale to Myspace, News Corporation's social network.

TechCrunch claims to know the financial details: "MySpace is acquiring Photobucket for $250 million in cash. We’re hearing that there is also an earn-out for up to an additional $50 million."

This makes perfect sense for both parties. MySpace gets to own one of the biggest -- if not, the biggest -- photo sharing site, and one of the largest benefactors of its eco-system. In return, Photobucket gets much needed infrastructure investment to counter rising bandwidth costs, and the freedom to monetize its presence on MySpace without falling foul of the site's terms of service.