MySpace Acquiring Photobucket; Pricing Around $250 Million
By David Kaplan - Mon 07 May 2007 11:56 AM PST
Update: Rafat adds: We have confirmed it through a reliable source and the deal has happened. The pricing is in the $250 million range in cash, though there might be a performance-based cash component for the next two years as well, from what we hear. This means the pricing came in close to the lower end of what the company and the bankers were expecting. More after jump…
I said in an earlier post that “any business built on the backs of MySpace and others are then subjected to the whims and fancies of that ecosystem and the companies involved.” Well, turns out “All’s Well That Ends Well”, in a family. Wired blog has a good line on this, though: “If the measuring stick for being safe as a MySpace enhancement business is ‘get bought, or get blocked,’ there’s plenty of trouble ahead.”
Also, IAC was in the bidding till the last moment, say our sources, but the pricing was too aggressive for anyone but MySpace/Fox.
Photobucket, with about 65 employees, generates revenue through ads, and users paying a subscription fee of $25 a year get more storage and don’t see ads. Last year Photobucket raised $14.7 million in second round funding. CEO Alex Welch said in a previous story that he expected the company to become profitable in Q3.
Original report: Still sorting out the actual details on this one: MySpace is acquiring photo-sharing site and former foe Photobucket, according to ValleyWag. The two settled their dispute, which was sparked by Photobucket’s practice of embedding video ads into MySpace member pages, quickly last month. No word on the financial terms, though Valleywag says Photobucket, and its bankers Lehman Brothers, were looking for at least $300 million.
Posted in: Social Media, Community, Photo Sharing, VC+M&A
