Online photo sharing startup Photobucket's banishment from MySpace couldn't have come at a worse time. The company recently hired investment bankers and floated a $300 million proposed sale price. Well, you can go ahead and knock that figure down. Bad news for Trinity Ventures, which led the Palo Alto company's $10.5 million second round last year.

Or is this a negotiating ploy by News Corp? Could the refusal to include Photobucket pictures on MySpace be a way to force Photobucket to accept a lower sale price from them?

I don't know, but this debacle shows that when a startup can't lock in its users and is completely reliant on the generosity of other web sites for distribution and therefore, revenue, the startup's true value is impossible to gauge. It ranges between what the income statement would look like without the partner and what it would look like with them.

For Photobucket, this should kill their sale aspirations for now. It looks like they must go back to the hard work of developing their company organically.

Tags: photobucket, trinity+ventures, myspace, vc, venture capital