Confirmed: MySpace To Acquire Photobucket For $250 Million
Posted by Admin @ April 1st, 2007 in Other Marketing
TechCrunch confirms that “MySpace is acquiring Photobucket for $250 million in cash,” with a
rumored earn-out of “up to an additional $50 million.
“Photobucket has been looking for a buyer since March, when they hired Lehman Brothers to help sell the company. They were looking for $300 million or more, but may have had few bidders other than MySpace. “The companies have been in serious acquisition discussions for the last couple of weeks – A dispute that involved Photobucket videos being blocked on MySpace led to acquisition discussions, and the block was removed. “Photobucket generated $6.3 million in revenue last year and planned on hitting $25 million or more this year. They have 40 million registered users and add another 85,000 per day.”
Photobucket so far operated relatively under the surface of the Internet. Their main service is to provide hosting of videos and images for users of services such as MySpace and eBay, that often have restrictions on photo and video uploads.
The acquisition seems to be motivated by profitability and preventing MySpace to be dependent on third parties. Photobucket seemed to be making the largest part of their income by selling advertisements, income that MySpace wished they had not lost.
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