MySpace To Acquire Flektor

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MySpace will acquire Flektor, a just-launched service that allows users to create widgets from photos, video and text, according to two sources with knowledge of the deal. This comes right after the news of MySpace’s pending acquisition of Photobucket last week for $250-$300 million. This will be a much smaller deal, in the $10-$20 million range, possibly with an earnout.

Flektor competes with more established startups like Slide and RockYou, and launched only a few weeks ago. Still, insiders say that the company has developed a killer set of tools to create slide shows as well as much more elaborate widgets that include audio, video, photos, text, effects and transitions. In our testing v. Slide and RockYou, Flektor came out way ahead in usability and features.

It’s an odd acquisition, though, since Photobucket also has a slide creation product that competes with Flektor.

But Flektor has a killer team of founders, Jason Rubin and Andy Gavin, who previously co-founded game developer Naughty Dog (Crash Bandicoot and Jak Daxter) and were acquired by Sony Computer Entertainment in 2000. Rubin and Gavin have leveraged their experience with gaming to create an awesome user experience at Flektor. Also, Flektor is custom code built on Flex, whereas Photobucket’s competing offering is built with Adobe’s tools. If Adobe decided to compete directly in this space, MySpace will be in a better position owning their own code.

The acquisition also makes sense from a strategic standpoint. MySpace has massive distribution as the largest site on the Internet. Photobucket brings storage to the table, and the Flektor team looks to be able to create awesome tools for users to create content. The three services actually fit together nicely.

We’ve emailed MySpace and Flektor for comment, nothing from them yet. Update: MySpace replied back declining to comment.

See our previous coverage of Slide, RockYou and Photobucket.

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