Eyeballs are Back

News Corp has bought Photobucket, Valleywag reports. Lehman Brothers, the startup’s investment bank, was reportedly looking for a valuation north of $300 million.

UPDATE: Michael Arrington puts the deal value at $250 million.

Photobucket had 17 million unique monthly users when it was acquired and had $6.3 million in revenue during 2006, according to reports.

Official numbers have yet to be released, but a $300 million valuation would represent 50x trailing revenue and over $17 per monthly unique visitor: a hefty premium for eyeballs.

It would also be a big win for the VCs that put $14.5 million into the company’s Series B last year. Investors include Trinity Ventures General Partner Gus Tai, his firm, IVP/PB Investment LLC, Red Tail Hawk LLP and Land Meets the Sea LLC.

It’s a deal that Trinity had to fight for. “While we were meeting with them, the founder’s cell phone was ringing off the hook from other VCs dancing around the company,” Trinity General Partner Larry Orr told VCJ last fall.

The deal may also help the ecosystem of remora-like startups that have latched onto MySpace. Even investments such as RockYou, which was working through a court injunction at the time it took money from VCs, seem justifiable if Photobucket got a $300 million valuation.

The Venture Capital Journal asked investors and executives about their MySpace strategy last September. We’ve made that story free for all PEHub.com readers. One comment still sticks out in my mind from that story. Mark Searle, CEO and founder of Log Savvy, a database software company, said “Back in the day, the deal you wanted was to be in Yahoo. You wanted them to be using your thing because then you got all the credibility. It’s clear that MySpace has come to occupy that space.”