TechCrunch has confirmed that MySpace and Photobucket were engaging in acquisition discussions for the past few weeks, and that both companies have agreed on an acquisition amount of $250 million for Photobucket. Photobucket has been on the market ever since it hired Lehman Brothers to help sell the company. Although Photobucket generated $6.3 million in revenue, and planned to make $25 million this year, the only serious bidder for the company was social-networking-giant MySpace.

The discussions began a few weeks ago after MySpace began blocking videos from Photobucket. This dispute is expected to have led to serious acquisition discussions, which in turn led to the eventual unblocking of Photobucket videos.