After rumored reports last week on NYC-based online photo sharing site Fotolog being acquired, the company has officially announced it: it has been bought by Hi Media (Paris:FR0000075988), a Paris-based interactive media company for about $90 million, in cash plus stock. Hi-Media is an online ad network/agency and a micropayments provider in France...it is traded publicly on Paris Eunonext exchange.

Fotolog has been popular outside U.S., especially in Europe and Latin America (biggest in Brazil), and has been looking to sell for a while. It had hoped for a price above $100 million, according to our sources. But monetizing disparate foreign audiences is a tough proposition, and probably helped in keeping the price below expectations. Even then, the multiples are pretty high, considering that 2007 expected revenues are in the $2.3 million range. The company started shop in May 2002, and had raised three rounds of funding, the latest being $4.1 million from 3i Group and BV Capital. In first round it raised $2.4 million.

On the purchase price, 77 percent will be in Hi-Media stock and 23 percent in cash...3i Group and BV Capital will now become shareholders in Hi-Media, and “expect to participate in the development of the combined company into a major pan-European online media and services group.”

Hi-Media will use its expertise on online ads and micropayments to monetize Fotolog. From the release: “While Fotolog has sustained losses since January 2007, its revenue has recently increased sharply (sales have increased by approximately 245% since January 2007), and management anticipates Fotolog will reach break-even within the six months following the acquisition, resulting in a positive contribution to the operating income of Hi-Media in 2008.” More details in release.

Updated: WSJ: The deal for Fotolog also is shedding light on Brazil’s role as an arbiter of Internet success. Fotolog first took off in Brazil and has since become a hit in countries such as Chile and Argentina, where it ranks as the No. 1 or No. 2 Internet site, depending on the week. Users typically post only one picture a day but may spend several hours a month adding poems or commentary and leaving messages for friends.