Fox Interactive, the corporate parent of MySpace may not be commenting on its rumored $250 million purchase of photo sharing & hosting service Photobucket, but the tongues are already wagging with many wondering who’s next. The name of the photo-sharing start-up quietly doing the rounds of likely buyers is one that is going to surprise many.

We have heard from multiple sources that Fotolog, a social photo site is one of the fast growing properties, getting a (notoriously unreliable) Alexa ranking of 24, which puts it above Photobucket.

The New York-based Fotolog started in May 2002 and now has eight million members, and is doing about 3 billion page views a month, with about 13 million unique users. In the last month alone the start-up has added about 700,000 users. Quantcast data puts them at about 26 million uniques.

So why is this company not getting the attention? Mostly because it is big in Spanish-speaking regions and in Southern Europe. The company has signed a deal with AOL, which will likely goose up the revenues for this little start-up.

But one should not confuse Photobucket and Fotolog. Fotolog CEO John Borthwick, a former Time Warner executive, on his blog notes:

Photobucket is a tool that is agnostic of destination – while Fotolog is a destination. Photobucket stores image-based media, then distributes it to your page on social networking sites such as Myspace, Bebo, Piczo, Friendster, etc. Fotolog is a destination where you post one image a day which then becomes the center of a social interaction/chat with your friends. It’s intentionally simple – stripped down and focused on the social media experience.

Borthwick agrees with the arguments we made in our post yesterday, even though he believes MySpace has grander ambitions for Photobucket.

Photobucket is a photo and video tool that could become a web-wide locker for the storage of digital media. Just as eBay’s acquisition of PayPal wasn’t meant to just serve just eBay, my guess is that NewsCorp’s purchase of Photobucket isn’t just meant to serve MySpace.

So who would be interested in this company? My guess is a large media player without a social media play. IAC, Viacom and several private investors could be interested in Fotolog. This is one you need to keep an eye on.