Valleywag reports that MySpace has bought Photobucket, with the deal evolving from a dispute between the two huge social media sites in which MySpace briefly banned Photobucket content. While it lasted, the dispute apparently served as a stark reminder of just how much Photobucket relied upon MySpace.
And yes, infrastructure and bandwidth costs were a factor in the deal, according to Valleywag:
The popularity of Photobucket's free service among users of the News Corporation social network took the service to 17m unique visitors per month, according to Comscore, making it the web's most popular photo site, ahead of rivals such as Yahoo's Flickr. But the venture's rising bandwidth costs have eaten up most of its revenue growth, according to people close to the transaction.
Some analysts predicted this deal, and see other opportunities for News Corp. to take advantage of the "MySpace economy" of sites that have built huge audiences by offering widgets, layouts and page-pimping tools. Could this be the first move in a "block them and buy them" strategy for MySpace?