If you believe the reports that MySpace (Fox Interactive Media) is acquiring Photobucket (apparently first written about at Valleywag, to whom congrats are thus due. Now TechCrunch says it’s confirmed) there’s a couple take aways that come to my mind. (This wouldn’t be the first time Valleywag wasn’t quite right on timing, but really – it’s not a bad source.)
The primary takeaway is that the recent peace found between MySpace and Photobucket was obviously not a sign that MySpace is any more open than before to third party services thriving in their ecosystem.  They just bought the biggest one, bringing it in house.  You have to wonder whether Photobucket’s valuation was hosed minus MySpace anyway, I suppose. They were presumably bought for both their huge userbase and their innovative technology (see this TC story, for example.)
I often remind people that MySpace is more open to third party widgets than many other hosted social networking or blogging services.  Disabling outbound links in Flash media and freaking out if said widgets are monetized in any way, though, is a real loss.  If MySpace allowed other companies to monetize their monstrous traffic, perhaps just taking a cut, then the whole market would see far more innovation than it does today or is likely to given the people and adspace hording by MySpace.
No one company can be all things to all people and they shoot their own long term growth in the foot by failing to support the growth of ancillary services.  There has got to be a way to turn what they see now as a parasitic relationship into a symbiotic one.  They probably don’t get that though and will suffer for their hubris against the spirit of new social media.
I was excited when eBay bought StumbleUpon, but this acquisition today just seems sad to me.
Since the first Photobucket video I grabbed off the site contains an obviously copyrighted song, it also makes me wonder whether Photobucket is about to face some serious lawsuits just like YouTube does now that it’s been acquired by someone with money.