Our tipster was right that Fotolog, the New York-based photo-sharing site had been sold — but wrong, alas, about the buyer, and the price. We'd heard of a Latin American buyer paying north of $100 million. Instead, it's Hi-Media, a French Internet concern, paying $90 million in cash and stock — a rich price for a company with 10 million users but only $2.3 million in revenues projected for this year. Hi-media is publicly traded on the Euronext stock exchange, so its shares are as good as cash. But Fotolog backers 3i and BV Capital say they plan to hang onto their shares and "participate in the development" of the combined company. So now the most interesting question is, who cashed out? We wouldn't be shocked if CEO John Borthwick, above, and founder Scott Heiferman were among those receiving an immediate cash payout. Borthwick has a host of other startup ventures, and Heiferman is the CEO of Meetup.

Some observers think that Fotolog's rumored sale price, at north of $100 million, is too rich. After all, the photo-sharing site has a mere 10 million users, putting the price on each user's head at $10 and up, while Photobucket, with 40 million users, reportedly sold to MySpace for an amount in the range of $250 million to $300 million, valuing its users at $6-$7.50 apiece. But that facile analysis ignores two important factors — factors which tell us much about the changing market for Web companies.

A source close to the company tells Valleywag that Fotolog, the social network and photo-sharing site, has been sold to a large Latin American company for an amount over $100 million. Fotolog CEO John Borthwick, who's on his way to Italy for a family vacation, hasn't returned a request for comment. Update: "As if," emails Fotolog cofounder Scott Heiferman. Still, the rumored sale, if true, makes eminent sense for Fotolog — and for Borthwick. Fotolog, though based in New York City, never took off in its home market. But overseas, especially in Latin America, it's huge. The site, which asks users to post a single photo every day, now counts more than 10 million members. While clearly successful, Fotolog is just one of many ventures for Borthwick, a former executive at AOL and Time Warner — and a sale would free him up to pursue those.