Murdoch snaps up Photobucket - source

Rupert Murdoch watched Google snatch YouTube but he's not letting Photobucket get away.

Social-networking site MySpace, owned by Murdoch's News Corp, has agreed to acquire Photobucket, the web's number one photo-sharing service, according to a source close to the deal.

The source, who requested anonymity because he isn't authorised to discuss the deal publicly, confirmed a story about the acquisition in the blog Valleywag. Before the deal is announced, the two sides must wrap up a few details, the source said. Financial terms weren't available but it is widely known that Photobucket, with 40 million registered users, has been shopping itself in recent months and asking for about $300m.

Representatives from both companies did not respond to interview requests.

The deal comes just a month after the two companies crossed swords in a very public public-relations battle. MySpace accused Photobucket of violating its terms of agreement by "encouraging" users to include advertisements in the slide shows they posted to MySpace. Photobucket said that without notice, MySpace began blocking the image-sharing site's photo slide shows and videos.

At the time of the fight, which ended with both sides agreeing to strengthen lines of communication, some industry insiders suspected the block by MySpace might signal an imminent acquisition. The theory went something like this: MySpace was trying to drive down Photobucket's price by dramatically illustrating how much Photobucket relied on the social-networking site for traffic.

What Murdoch, News Corp's chairman, is getting for his money is a company that appears to be following a path forged by YouTube. Photobucket employs a technology that enables users to post photos and videos to any website. It has also seen its number of unique monthly visitors more than double to 18 million in the past year, placing it firmly among the web's top 50 sites and is seeing about 45,000 videos added to the site daily.

Greg Sandoval writes for CNET News.com