• The New York Times, Tuesday, May 8, 2007 11 AM

In response to the news that MySpace may be acquiring Photobucket for close to $300 million, reports across the Web weigh in on the extent to which the two companies are linked. The short answer: to a very great extent, which should give the photo storage site the upper hand in negotiations. Nevertheless, it's MySpace that's bullied Photobucket into accepting an offer, as Internet biggies like Google, Yahoo and MSN showed no interest.

Last month, after Photobucket hired Lehman Brothers to negotiate a sale, MySpace started blocking media files stored on Photobucket. The News Corp. site soon relented, however. According to the research firm Hitwise, 60 percent of Photobucket's traffic came from MySpace users as of last Saturday. For those leaving MySpace, the media storage site was the third most-visited destination for its users, after Google and Yahoo. Photobucket says it has 41 million users, nearly one-fifth of MySpace's total user base; most of its users are also heavy MySpace users.

However, not everyone is bullish on a MySpace-Photobucket union: TechCrunch's Michael Arrington points out that despite obvious synergies of the two companies, a union is unlikely to result in more users for News Corp.; the overlap rate is nearly 100 percent. But an acquisition would likely result in more page views per user across the Fox Interactive Media network, as MySpace users are encouraged to store their media files on Photobucket. With nearly 200 million worldwide users, the name of the game for MySpace is traction.

Read the whole story at The New York Times »