Hi-Media, which is based in Europe, is an interactive agency. And, it has some cash to work with. That is, the company has announced that it has plunked down $90 million for Fotolog, a highly popular photo-sharing site.

Fotolog has more than 10 million member accounts across over 200 countries. There are roughly 3.3 billion monthly page views. What's impressive is that the growth has been primarily through viral methods.

Now, by being part of a digital agency, I think there are some opportunities for monetization. After all, Hi-Media has a strong ad network. Currently, Fotolog has a deal with Google Inc. (NASDAQ: GOOG).

What's more, Hi-Media also has a thriving micro-payments business. No doubt, this can be a way for Fotolog to sell premium offerings.

All in all, it seems like a pretty good deal. But, with a forecast of $2.3 million in revenues for 2007, the price tag is certainly frothy.

If you want to check out other M&A deals, click here.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

I recently talked to a former big-wig at MySpace. He said he was very impressed with the online video/mashup site, Photobucket.

Well, maybe Photobucket was getting too big. According to a piece in CNET, MySpace has blocked Photobucket users from posting on the site.

Why? Well, users were placing ads in the videos. And that's apparently a violation of the MySpace terms of service.

From what I understand, Photobucket gets a big chunk of traffic from the News Corp. (NYSE: NWS) site. So there's probably incentive to get a deal done, right?

Maybe not. Photobucket is trying to rile up its community against MySpace's actions. You can check it out on its blog.

I had a chance to interview Mark Sigal, the CEO and co-founder of vSocial, an online video site. According to him:

"There is no question that Photobucket hugely benefits from it's plug into MySpace, although I don't know the specific percentages. It speaks to the paradox of MySpace on the one hand benefiting from the rise of social media, which is fundamentally about openness and ease of viral distribution (so-called "embed and spread"), and on the other wanting to maintain control of it's ad inventory. Similarly raises the question of how services like Photobucket, which rely on being able to monetize viral traffic, build a business."

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

I think it is generally recognized that the Web 2.0 world loves flickr, with its viral, community-focused fun and its AJAXerrific cool. But a recent report from Hitwise shows that flickr is a distant sixth in terms of market share, at just less than 6%, beaten handily by 44% dominator PhotoBucket (the company's competitive strategy: be a storage backend for users who wish to post photos to MySpace), and even by the far less sexy service of flickr's parent, Yahoo! Photos, at 18% (in second place). Webshots Community, Kodakgallery.com (formerly Ofoto.com), and ImageShack all rank ahead of flickr in terms of market share.

There's a story here, that flickr may seem cool but it's not even a big deal in the traffic big dogs. I don't know if I buy it. LeAnn Prescott, who blogs the market share charts, notes the MySpace strategy of PhotoBucket and mentions that three photo sharing sites in the top 10 are getting the vast majority of their traffic from the teen-centric social network, including Imageshack and Slide.

It's all about the growth of the platform, and the longevity of the business strategy. As a hard-core photo enthusiast who lives and breathes Web 2.0, I've used most of the non-MySpace services. I did Webshots Community, then I switched to Ofoto, and when Kodak bought it I was using Yahoo! Pictures and my own web site. And then I discovered flickr. Now I have 1,859 photos uploaded there. I think that I -- an early adopter who has already convinced any number of friends, family, and colleagues to switch to flickr -- am a fair indicator that the prospects for flickr are good. I have to wonder if PhotoBucket and others who rely so much on one source of traffic.

There it is: the real question. Is that one source a long-term play? Will MySpace still be rocking and rolling in three, five, 10 years? I doubt it. I'd put my money on the technology and monetization potential of flickr anyday.