MySpace to Google: Take YouTube and We'll Buy Photobucket

Today, MySpace managed to acquire Photobucket, the famous photo sharing service, for about $250 million. The company was looking for a buyer since March when they announced that the service is available to anyone who pays $300 million. TechCrunch sustained the two firms first negotiated the acquisition one month ago, but they finally confirmed it today. Photobucket is currently one of the most used photo sharing services on the Internet, having no more than 2.8798.488.473 billion images (and growing) hosted on their servers.

The acquisition is somehow similar to the YouTube investment when Google paid $1.65 billion for the most powerful online video sharing service at that time. MySpace managed to buy a popular service for quite a small amount of money in comparison with Google which invested a huge sum into YouTube. At the time of the acquisition, YouTube was the leader of its category with a single powerful rival - Metacafe. MySpace bought Photobucket, an online photo sharing service that competes with Yahoo's Flickr for the leader position.

However, the two companies were involved in quite an interesting dispute that caused a ban for YouTube on the social site. Just after the Google acquisition, the users were starting to post YouTube clips in their profiles, boosting the number of visitors for the search giant's product. Because YouTube was growing up, MySpace felt the threat and banned Google's video service so no user was able to post an embedded clip in his profile.

At this time, the online photo sharing market has only two powerful competitors: MySpace with its newly acquired Photobucket and Yahoo with the famous Flickr. Google always avoided entering the battle, preferring to remain focused on its video sharing products.