Our tipster was right that Fotolog, the New York-based photo-sharing site had been sold — but wrong, alas, about the buyer, and the price. We’d heard of a Latin American buyer paying north of $100 million. Instead, it’s Hi-Media, a French Internet concern, paying $90 million in cash and stock — a rich price for a company with 10 million users but only $2.3 million in revenues projected for this year. Hi-media is publicly traded on the Euronext stock exchange, so its shares are as good as cash. But Fotolog backers 3i and BV Capital say they plan to hang onto their shares and “participate in the development” of the combined company. So now the most interesting question is, who cashed out? We wouldn’t be shocked if CEO John Borthwick, above, and founder Scott Heiferman were among those receiving an immediate cash payout. Borthwick has a host of other startup ventures, and Heiferman is the CEO of Meetup.

Sometime actor Andrew Shue, pictured left, is best known for playing Billy Campbell, the most boring character on ’90s nighttime soap opera Melrose Place. Less well known is his status as cofounder of CMI Marketing, the parent company of social networks ClubMom and CafeMom, the latter of which recently received $5 million in funding from VCs Draper Fisher Jurvetson and Highland Capital Partners. Moms or not, we have a great idea for how to get more traffic on the CafeMom site: Post pictures of Andrew Shue in his underwear. We bet he’ll pose for new ones in exchange for just a few extra stock options.

Source:Valleywag

Microsoft is allegedly demanding that startup XBux change its name to the far less hip XBucks, lest consumers be unable to distinguish between its Xbox 360 videogame console and a network that unites athletes with sponsors. Of course, we imagine Starbucks will then have grounds, as it were, to complain. [VentureBeat]

Source:Valleywag

Some observers think that Fotolog’s rumored sale price, at north of $100 million, is too rich. After all, the photo-sharing site has a mere 10 million users, putting the price on each user’s head at $10 and up, while Photobucket, with 40 million users, reportedly sold to MySpace for an amount in the range of $250 million to $300 million, valuing its users at $6-$7.50 apiece. But that facile analysis ignores two important factors — factors which tell us much about the changing market for Web companies.

One, the recent deal between Fotolog and Google, which brought it a $75 million revenue guarantee, according to Silicon Alley Insider. Revenue matters, even if it comes in the form of an ambitious guarantee from a deep-pocketed player.

Two, Photobucket, as a storage site mostly used as a widget on sites like News Corp. sister site MySpace, commands little attention from its users. As Fotolog CEO John Borthwick points out, Fotolog, by encouraging users to visit the site and chat with friends there, gets them to visit the site nearly four times longer than Photobucket’s users. Advertisers are increasingly looking for engagement, not just raw numbers, when evaluating social-networking sites as a marketing medium. And by that measure, Fotolog’s rumored buyer may have underpaid — or Rupert Murdoch, in snapping up Photobucket to bolster MySpace, may have overpaid.