The deal involves a combination of cash and stock valued at around $90 million. Fotolog has an audience of more than 10 million member accounts.

Cyril Zimmermann, CEO of Hi-Media, said, "Hi-Media was attracted by Fotolog, which has only just begun converting its strong audience growth into revenues. We think that social networks are one of the pillars of what the Internet is and will be important in the years ahead, especially when underpinned by simple mechanisms."

"We are also convinced that Hi-Media can benefit substantially from Fotolog’s efforts to generate maximum revenues from its audience thanks to the advertising and micro-payment services that Hi-Media has developed over the past decade. In addition, we believe that the expertise and experience of the Fotolog teams who are joining us will allow us to reinforce and accelerate the development of our publishing division."

Fotolog launched in May 2002 and provides a platform for users to share photo postings or "photologs" with members and friends. Fotolog has seen solid growth this year, doubling the number of its member’s accounts to over 10 million, reaching 15 million unique monthly visitors and logging more than 3.3 billion in monthly page views.

Fotolog projects its revenue for 2007 will be about $2.3 million. Sales for the company have increased 245 percent since January and Fotolog says it will break even within six months following the acquisition.

John Borthwick, Fotolog Chief Executive Officer, said, "We found the ideal partner in Hi-Media Group to build on our strong momentum and monetize our fast-growing audience. This will be one of the biggest publicly-traded Internet pure plays in Europe, bringing together Hi-Media’s leading ad network and Fotolog’s large and highly-engaged user base. Hi-Media is committed to investing in Fotolog’s compelling member experience and growing the platform we have created."

Fotolog was founded in 2002 and is a photo-blogging site that has a large following in Europe and Latin America. The site has 15 million unique users and 3.5 billion page views per month. The site is ranked 20th in the world for traffic to its Web site according to Alexa and is the third largest social network as measured by traffic.

Google will offer search functionality and advertising on Fotlog’s network under a three-year agreement. Financial terms of the deal were not released.

Fotolog also said it is close to reaching 10 million registered users. Two months ago the site reached 8 million registered users and 4 million new members joined the site in the first half of 2007.

"Fotolog’s agreement with Google, the world’s largest search engine, comes at a time when we are already growing at a rate of approximately 30,000 members a day," stated Fotolog CEO John Borthwick.

"For more than five years, we have expanded exponentially by offering our users a uniquely compelling social networking experience by means of visual navigation. Our rapid expansion has now brought us to a scale where we can add Google’s world-class search functionality and integrate its targeted advertising platform to make this experience even more immediate and engrossing."