Photobucket holds around 40% share of the U.S. photo sharing market – nearly four times of the second ranked, Yahoo! – and is popular among many sites such as Facebook, Bebo, Friendster, eBay, Craigslist, Blogger and Xanga for providing free online storage for photos and videos; but nearly 60% of its traffic comes from MySpace and only a small percentage of Photobucket users are not already regular users of MySpace.
Last month, MySpace blocked Photobucket images from its website accusing Photobucket of violating the social network site's service terms, to which Photobucket responded with a blog post claiming MySpace was limiting the freedom of its users to connect to outside sites such as Photobucket. Two weeks later the dispute was over, stating open lines of communications had been established to prevent a sudden block of content in the future. An official announcement of the acquisition is expected today.