The two companies have worked together for some time. Ontela created the mobile application for Photobucket, the popular photo-sharing site with 22 million online users. Photobucket said it will leverage Ontela’s partnerships with 30 wireless carriers to help drive the popularity of Photobucket on mobile.

Shapiro said in an interview that leading up to the merger, they were always coming up with more ways to work together. While he did not want to elaborate, he said there will be a whole wave of innovation as cameras become network connected, much like how photography moved to digital. For sure, Photobucket has scale in digital. It serves more than 100 billion images a month. But only 11 percent of camera phone pictures are uploaded to the web, even though they are responsible for more than 50 percent of photos taken today, according to the company’s internal research.

Shapiro said going forward, Ontela’s Seattle offices will focus on mobile, while the headquarters will be in Denver. There are 23 employees in Seattle, and 88 in total. A CEO will be named over time. He would not share the financials of the deal, but said that all four of Ontela’s investors contributed more capital. They are: Oak Investment Partners, Voyager Capital, Walt Disney’s Steamboat Ventures; and Covera Ventures (formerly Hunt Capital). Previously, TechCrunch reported that Ontela might acquire Photobucket for $60 million (a drop in the bucket compared to the $300 or so News Corp paid to buy Photobucket two years ago).

Jon Miller, chairman and CEO of Digital Media for News Corp., will serve as a director of the combined company. Miller: “In partnering with Ontela and its investors, we are able to maintain and expand our strong foothold in the online imaging category. As consumers evolve the ways in which they capture, consume and share their photos and video across multiple devices, there couldn’t be a more perfect partner for Photobucket to align with as it enters this new chapter.”