MySpace, part of Rupert Murdoch's News Corp. , has reached a preliminary deal to acquire Photobucket, the world's top photo-sharing site, for around $250 million in cash, a source familiar with the deal said on Monday.
Photobucket functions like a kind of Swiss bank for depositing and transmitting photos, helping Web users post their photos on other social networking sites, instead of trying to keep the users locked up on its own site.
While hardly known outside the youthful world of social network sites, Photobucket has become wildly popular with users for providing free, online storage tools for multimedia self-expression, from photos to videos to digital slideshows. Site builders turn to it for images to decorate their sites.
The web site has signed up 41 million registered users, up from 32 million at the end of last year and 2 million in 2004. It now hosts nearly 2.8 billion images on the site.
The agreement with MySpace, the world's top online meeting place and part of NewsCorp.'s Fox Interactive online business, is tentative and could still fall apart, the source cautioned, according to Reuters.
Nearly 60 percent of Photobucket site traffic comes from users leaving MySpace properties, Hitwise click data shows. Photobucket is the third most popular destination for MySpace users after Google and Yahoo, according to Hitwise statistics.
However, the relationship has proved rocky: Last month, MySpace blocked traffic from its site to Photobucket after a dispute over technical issues led MySpace to accuse Photobucket of violating the social network site's service terms.
On April 10, Photobucket posted a statement on its blog that attacked MySpace for limiting the freedom of its users to connect to outside sites such as Photobucket.
Two weeks later, on April 23, Photobucket said his company had talked to MySpace and resolved the dispute.