Exclusive: Photobucket goes to Myspace
Like a squabbling couple finally realizing they can't live without eachother — or a parasite fusing with its host — Photobucket has concluded terms of a sale to Myspace, News Corporation's social network. The photo sharing service …
Context & Ripple Effects
Photobucket’s role in MySpace posting was already central enough to prompt the question of whether the photo host could survive without the social network. Its April posting integration with MySpace made that dependency visible before the acquisition terms were concluded.
MySpace is bringing a service reported to have 38 million members into News Corporation’s social-network operation. The deal turns a distribution dependency into common ownership, rather than leaving Photobucket as an independent supplier to MySpace.
First-order effects
- MySpace gains control of a major photo-sharing service and the media-posting path its members use, while Photobucket moves from an outside provider to a News Corporation-owned property.
- Photobucket’s 38 million reported members and its premium Flash editing tools become assets MySpace can incorporate into its social-network offering.
Second-order effects
- Independent photo hosts competing for users who publish through MySpace lose a key distribution relationship, as MySpace can align its own service more closely with its network.
- MySpace’s media features can be coordinated with Photobucket’s hosting and editing products, raising the switching cost for users whose photos and profiles are tied to both services.
Third-order effects
- The transaction points to social networks treating complementary hosting and creation tools as strategic infrastructure, not interchangeable third-party services.
- If this pattern persists, consumer web moats will increasingly be built by combining audience distribution with the services that supply profile content and media.
The trend: Social networks are moving to own the media tools and hosting layers that underpin member engagement and content distribution.