Apparently an overzealous Photobucket employee is the source of this rumor, but we’ve confirmed it with more senior people: MySpace is acquiring Photobucket for $250 million in cash. We’re hearing that there is also an earn-out for up to an additional $50 million.
Photobucket has been looking for a buyer since March, when they hired Lehman Brothers to help sell the company. They were looking for $300 million or more, but may have had few bidders other than MySpace.
The companies have been in serious acquisition discussions for the last couple of weeks – A dispute that involved Photobucket videos being blocked on MySpace led to acquisition discussions, and the block was removed.
Photobucket generated $6.3 million in revenue last year and planned on hitting $25 million or more this year. They have 40 million registered users and add another 85,000 per day.
Our first coverage of Photobucket was a year ago. They’ve raised $15 million over two rounds of financing.