Did MySpace make a good deal for PhotoBucket?

PhotoBucket serves roughly 3 billion photos and videos every day for 41 million members. About 85,000 new members sign up each day, that is about 40% of all photo-sharing activities. In comparison, Yahoo and Flickr together account for only about 10% of all photo/video sharing activities.

Though it hosts pics and vids free of charge, PhotoBucket is a cash cow. In addition to a $25/year subscription fee, it makes money by displaying ads while users wait for photos and videos to upload to the site. PhotoBucket brought in about $6.3 million in revenue in 2006. As more advertisers and users sign on, they are expecting revenue to jump to $25 million in 2007.

Another interesting fact is that users are staying on-site. In December 2006, the average users viewed 13+ pages each visit. As publishers begin to pay more attention to the engagement level of users (how many pages are viewed, how long a user stays on-site), these numbers become even more important.

However, according to Hitwise, upwards of 60% of PhotoBucket's traffic already comes from MySpace. So, is $250 million a good deal or is MySpace duplicating its efforts? The short answer is possibly. However, with users already on both interfaces, the joining could result in more time spent on the websites, improving that all-important engagement level.

Tags: MySpace, Photobucket, social marketing, user-generated