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MySpace is rumored to be purchasing Flektor, a new startup that allows users to create widgets from photos, video and text, TechCrunch is reporting.

The news comes on the heels of MySpace's deal to buy Photobucket last week for $250-$300 million. The acquisition of Flektor is reported to be a smaller deal worth between $10-$20 million.

The deal could have negative implications for similar sites such as Slide and RockYou. VentureBeat raises the point,"While both Slide and RockYou have huge user-bases, they also depend heavily on social networking giant MySpace and other sites."

"MySpace has made it abundantly clear that it is happy to pull the plug on widgets that lose its favor. If a Slide or RockYou try to push more advertising, and compete head-on with one of MySpace's new properties (Photobucket, and potentially Flektor), MySpace may try to snuff them."

The Flektor founders Jason Rubin and Andy Gavin co-founded game developer Naughty Dog, creators of Crash Bandicoot and Jak and Daxter before selling the company to Sony Computer Entertainment in 2000.

TechCrunch views the acquisition of Flektor as odd since Photobucket also offers a slide creation product which means the two would be competing against each other. But they add, "Flektor is custom code built on Flex, whereas Photobucket's competing offering is built with Adobe's tools. If Adobe decided to compete directly in this space, MySpace will be in a better position owning their own code."

"The acquisition also makes sense from a strategic standpoint. MySpace has massive distribution as the largest site on the Internet. Photobucket brings storage to the table, and the Flektor team looks to be able to create awesome tools for users to create content. The three services actually fit together nicely."