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Photo Software - Monday, May 7, 2007

Report: MySpace Buys Photobucket

UPDATE: The story has legs with a couple of other sites claiming that they have confirmed the deal in the $250M range, with earn-outs up to $50M.

In the never ending race to get the scoop, we are finding a torrent of reports on deals that often do not come to pass. So we take today's report that MySpace has bought PhotoBucket with a grain of salt as neither company has confirmed the deal at the time of this post.

ValleyWag reports that MySpace has bought Photobucket. It sounds plausible given reports that PhotoBucket had hired Lehman Bros. to find someone willing to pay $300M. Moreover, MySpace had recently made a point to Photobucket my blocking Photobucket access points. Photobucket is backed by Trinity Ventures and Insight Venture Partners. MySpace has a competing service, but its users overwhelmingly show that they prefer Photobucket.

We would be very surprised if PhotoBucket was able to get anything like $300M given that the company only made $6.3M last year and operates at a loss due to high bandwidth costs.

Read - PhotoBucket Goes To MySpace (ValleyWag)