MySpace's owners Fox Interactive Media, which is a division of News Corp, is set to buy following a series of discussions with founders and creators Alex Welch and Darren Crystal.
Photobucket, which is a free to use service, hired investment bank Lehman Brothers earlier this month to advise it on the sale of the company. It is understood a fee upwards of $300m will be agreed for the site, which competes against the likes of Kodak Gallery, Yahoo's Flickr and Shutterfly among its main rivals.
Photobucket, which claims to be the world's largest photo sharing website, is being sought by MySpace to supplement the portal's image sharing capabilities among users and is already widely used by Myspace members.
According to Hitwise, 60% of MySpace account holders use Photobucket to put images on their personalised websites.
The website has grown massively over the last 12 months from 14m to 41m registered users, and claims to have 2.8bn images hosted on its pages.
It currently has a 41% share of the US online image sharing market, more than four times greater than its closest rival, Yahoo, which owns Flickr.The website was set up in 2003 by Welch and Crystal, and is listed as one of the top 50 websites in terms of web traffic according to ComScore.
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