Shrugging off fears of a new dot-com bubble, Fox Interactive Media (FIM), the owner of MySpace, intends to press on with an “aggressive acquisition strategy” after buying Photobucket, the most popular photo-sharing site, for an estimated $250 million (£125 million).

Peter Levinsohn, the President of FIM, told Times Online that the recent “feeding frenzy” in the internet M&A market, especially in online advertising, had left “lots of assets overvalued.”

However, he added that FIM, which is owned by News Corporation, parent company of Times Online, will buy businesses that provide “jump-starts in new markets” and technologies that boost revenues from FIM’s existing sites, which also include FOXSports.com and AmericanIdol.com.

The Photobucket deal was “accretive and of strategic importance,” he said.

It follows several recent big bets on the future of online advertising, including Microsoft’s $6 billion acquisition of aQuantive, the online ad group - an 85 per cent premium to the company’s previous share price - and Google’s $3 billion purchase of rival DoubleClick.

Photobucket, which acts as an online repository of images which can then appear on several websites, has about 42 million users and is adding more than 80,000 a day. It receives about half its traffic from social networking sites, chiefly MySpace, and is expected to post revenues of about $32 million this year, 80 per cent from advertising.

The two groups have had a symbiotic but rocky relationship. MySpace recently blocked access to Photobucket ads, which were being inserted into its site by Photobucket users. FIM said Photobucket will be run as a stand-alone business.

FIM, which record more than 45 billion page views a month, also acquired Flektor, a site that provides web-based picture- and video-editing tools.

Terms of the two deals were not disclosed.

Alex Welch, the group’s co-founder and chief executive, has predicted Photobucket, which was advised by Lehman Brothers, will be profitable next year.

In a post on Photobucket's blog, he said: "We expect nothing to change in our day-to-day operations ... the plan is to operate Photobucket as an independent, standalone company within FIM."

News Corp snapped up MySpace for $580 million in 2005. It has also tabled a rejected $5 billion (£2.5 billion) bid for Dow Jones, the owner of The Wall Street Journal.

California-based Photobucket hosts nearly 2.8 billion images. It accounts for an estimated 40 per cent share of the US online photo-hosting market, nearly four times more than second-ranked Yahoo!, which bought the rival site Flickr last year, according to Hitwise, the market researcher.

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