MySpace to Acquire Photobucket

After a high-profile spat between the two companies, it now appears MySpace and Photobucket will make up with merger valued at between $250 million. In a peculiar twist of events, it was MySpace's move to block videos from Photobucket that jump-started talks between the two parties. The photo site had been looking for a buyer since March.

Rumors of the deal first surfaced over the weekend on several blogs and were confirmed by Silicon Valley watcher Michael Arrington on Monday. Although the agreement has not been publicly announced, Photobucket executives called a staff meeting late Monday morning Pacific time.