MySpace reaches agreement to acquire Photobucket
MySpace, the popular social networking site that is growing quickly, and has become a rage among the youth has reached an agreement for the acquisition of Photobucket. Photobucket and MySpace are leaders in their respective categories. The deal values Photobucket at $250 million(in cash).
Photobucket is unique in the world of image-sharing, because it functions more like a cheap image host rather than a social network like Flickr. This allows users of MySpace, FaceBook, Bebo, eBay, Blogger etc., many of which do not provide image hosting space.
They had just 2 million users in 2004. The figure rose to 32 million users at the end of 2006, and now stands at 41 million. Talk about growth!
It now hosts nearly 2.8 billion images on the site.
Experts agree that the deal may not be completed, thanks to various factors on the part of MySpace owner NewsCorp.
Alex Welch and Darren Crystal founded Photobucket, with the idea of simple image hosting without the frills, for those who can do without advanced features that most of the other commercial hosts boast of.
Welch, CEO, ran Photobucket on credits for the six months before he borrowed. He depended on venture capital only after proving Photobucket’s worth.
Photobucket holds more than two-thirds share of the U.S. image-hosting market, way above the popular Flickr. It was the 22nd most visited American site last week, according to Hitwise.
Despite Photobucket’s phenomenal growth, people don’t recognize it as a giant, primarily because its growth is dependent on that of MySpace.
The facts
Sixty percent of Photobucket’s traffic originates from leaving MySpace. Take out MySpace, and Photobucket is next to nothing.
Rocky terrain
This excess dependence caused headache for Photobucket. When MySpace blocked images from Photobucket, Photobucket were in trouble.
Photobucket, in its blog, made some damaging statements against MySpace, following this issue. However, nearly two weeks later, Photobucket solved the issue.
P.S: They must have known that damaging statements wouldn’t save their cause.
