Denver-based Photobucket, a company that allows people to store and edit photographs and videos online, was purchased Wednesday by News Corp.
It’s an effort by News Corp. to provide more resources to avid users of its social networking site MySpace.
Photobucket was founded in 2003 by two former Level 3 Communications employees, Alex Welch and Darren Crystal.
Financial terms of the deal were not disclosed. But The Associated Press cited sources saying News Corp. was paying about $300 million for Photobucket. News Corp. paid $580 million in 2005 to buy MySpace.
Photobucket is a popular spot for photo-sharing on the Web, with more than 42 million registered users. According to Nielsen/NetRatings, 15 million unique visitors came to the site in March.
Photobucket will remain a separate company under News Corp.’s Fox Interactive and will remain headquartered in Denver. The company expects to add 25 new engineering and operations employees by the end of the year, said Welch, the chief executive. The company employs 45 workers locally and 12 in Palo Alto, Calif.
“As we continued to build out services and our roadmap, it made sense to sit down and look at strategic options,” Welch said. “When we looked at everything we were looking to accomplish … it made sense to team up with Fox Interactive.” Photobucket had been in talks with Fox and other companies for the last couple of months, Welch said.
There are no plans to change Photobucket’s management, and the company will use the deep pockets of News Corp. to make new hires and add new features, Welch said.
Photobucket not only lets users upload and store photos online, but it has gained popularity because it gives users the ability to cut and paste, or embed, a link or piece of code onto other sites such as MySpace for easy viewing. Some other photo-sharing sites, by comparison, only let users invite friends and family to a special page to view photos.
This ability for users to use “widgets” like the one Photobucket offers will continue to drive heavy usage from blogs and social networking sites, said Emily Riley, an advertising analyst for Jupiter Research. “It is significant in that MySpace recognizes the importance of widgets,” she said. “The widgets themselves increase the usability of the sites. Whichever site has the best usability will be popular.”
Photobucket and MySpace butted heads in April as MySpace temporarily blocked content designed by Photobucket. Photobucket had encouraged users to build slide shows promoting “Spider-Man 3,” which MySpace considered a violation of policies banning unauthorized commercial activities.
“We resolved the issue, it was an isolated incident,” Welch said.
The AP contributed to this report.
Staff writer Kimberly S. Johnson can be reached at 303-954-1088 or kjohnson@denverpost.com.
