News Corp., via MySpace, acquired photo/video sharing site Photobucket back in 2007 for $250 million, plus a $50 million earnout. We’ve now learned through a source with knowledge of the deal that MySpace is in the process of selling at least a majority interest in Photobucket. The likely buyer? Disney-backed Ontela, a Washington state startup.
Photobucket has grown steadily since the acquisition, and currently brings in 54 million worldwide users each month (Comscore). But MySpace never integrated with Photobucket, keeping their own separate photo and video platforms.
It’s been little more than a side show ever since the acquisition, and the founders have left to do other projects. With News Corp. scrambling to fix up its digital division, it’s no wonder Photobucket has been on the chopping block.
Best of all, the deal will bring in new cash to News Corp.
It’s not clear that the final terms have been worked out. But our source tells us that News Corp. will sell a majority stake in Photobucket, retaining some equity. If Ontela is the buyer, the merged company will take a new round of financing, with most of the cash going to News Corp., and part of it going into the new company.
Presumably this deal won’t look much different from eBay’s spinoff of StumbleUpon earlier this year, except on a larger scale. News Corp. gets a cash injection and retains a portion of Photobucket. And the service, combined with Ontela or another buyer, gets a new start.
Ontela didn’t return a request for comment. MySpace isn’t answering their phones or email. Everyone is being very quiet about the deal in general, in fact. We’ll update as we learn more.
Update: more details here.
photobucket use to be cool, before it was acquired by news corp.
It’s exactly the same as it was before. I’m not sure if this is good or bad for ImageShack.us
BTW: They finally acquired ImageShack.com, yet they still default to the .us. Why?
This is of course after trying to obtain it Via WIPO. This should be a lesson to anyone starting a company that you should take your domain name more seriously. No doubt they paid $500k or more to get the .com years later.
what was the point of buying photobucket for news corp?
Yahoo should buy it and merge it with Flickr. I know a LOT of people who are still using photobucket (especially for forums).
yahoo does not need another way to lose money…
noone with a brain uses photobucket anymore. the stupid bandwidth limit is a joke, thousands of other hosts exist without one.
If this rumor is true, it makes absolutely no sense. PB brings it in on its own. Must be additional deals in the works to bundle up and roll.
Photobucket has grown while myspace has shrunk. Seems like a decent ideal to sell off part of photobucket when it’s value is high.
If it is making money why sell it?
thank islami forum
thanks.. dini chat
Photobucket sucks