The deal could be announced as early as Monday afternoon, according to the blog.
MySpace accused Photobucket of violating its terms of agreement by "encouraging" its users to post advertisements in the photo slide shows they posted to MySpace.
Note: This post was cross-posted from a CNET News.com story.
Update: The deal has been confirmed, and is now set to close at around $300 million dollars. An official announcement from the two sides won't take place until an agreement is made.
Photobucket currently gets about 45,000 new video submissions a day, many of which are hosted on the MySpace member profiles. Despite being at odds with MySpace's own video hosting and sharing service, the Photobucket acquisition has the potential to strengthen MySpace's current photo sharing features.
More details can be found on CNET New.com.