Fox Interactive Media Buys Photobucket

After a public tiff between the two companies, MySpace parent company Fox Interactive Media is buying media-sharing site Photobucket for an undisclosed amount.

After a technical tiff last month which saw popular social networking site MySpace blocking access to some ad-supported content hosted on Photobucket, MySpace parent company announced today it is acquiring Photobucket for an undisclosed amount. A pending deal has been rumored for several weeks, in part because so much of Photobucket’s traffic is linked to MySpace, with markt research firm Hitwise recently estimating some 60 percent of Photobucket’s traffic originates from MySpace.

Fox Interactive Media also announced it acquiring Flektor, a Web-based service which enables user to creat online slideshows, presentations, and video mash-ups. As with the Photobucket deal, financial terms of the arrangement were not revealed.

“The acquisition of these two companies is a perfect strategic fit for us that reinforces FIM’s leadership in user-generated content,” said Fox Interactive Media president Peter Levinsohn in a statement. “As a leading site for creative expression Photobucket extends our reach among personal media sharing enthusiasts, and the innovative new entrant Flektor brings highly-differentiated new tools to the table that will drive the next generation. Together, they represent a powerful combination and we are thrilled for them to join our network.”

Photobucket co-founder and CEO Alex Welch says Photobucket users can expect business as usual in the day-to-day operation of the Photobucket service, and Photobucket will continue to operate as a standalone, independent company within Fox Interactive Media.

However, Photobucket account holders who use the service to host media for other social networking sites—like Bebo, FaceBook, Friendster, Xanga, and others—might have some cause for concern: Fox Interactive Media might be happy to earn revenue by pushing media via those competing social networking sites…or it might not be happy with the idea of providing media dn functionality to MySpace’s competition.