MySpace/Photobucket: User Overlap Is Nearly 100%

NewsCorp plans to pay half as much for Photobucket as they did for MySpace. Photobucket is going for $300 million with the earnout (a steal compared to Google/YouTube), and MySpace was acquired for $580 million, back in 2005.

Two separate analytics services, though, show that the Photobucket deal will bring very few new customers to MySpace because of the nearly 100% overlap in users.

Nielsen/Netratings says MySpace has 55.9 million monthly unique visitors, compared to Photobucket’s 14.7 million. Combined though, the sites will have just 57.7 million unique visitors. That means just just 1.8 million of Photobucket’s visitors don’t currently visit MySpace, too. That’s a 3% gain for MySpace. If you count just new users, MySpace is paying $167 for each one of them.

Comscore tells a similar story, showing that 77% of Photobucket’s users are also visiting MySpace regularly.

As a point of comparison, the overlap between Google and YouTube was even greater according to Comscore. At the time of the acquisition in October 2006, 80% of YouTube’s users also visited Google regularly.

MySpace already offers its users the same basic services as Photobucket (photo and video sharing). If they aren’t buying Photobucket for the product and they aren’t getting any new users…then why are they buying them? To limit the availability of Photobucket features and all that user content to other fast-growing social networks without these features? Because they can? Let’s see what MySpace has to say about this as the deal closes.