Internet Changes Everything

Google makes deal with MySpace

globeandmail.com : Google makes deal with MySpace

Associated Press

New York — Google Inc. reached a deal Monday with the owner of MySpace.com to pay at least $900-million (U.S.) in shared advertising revenue and become the exclusive search provider for the popular online hangout.

The deal, which marries the Internet's leading search engine with the top social-networking site, means News Corp. will have essentially paid off the bulk of the $1.2-billion it spent last year to acquire both MySpace and the online video-game company IGN Entertainment Inc.

Under the multiyear deal, News Corp.'s Fox Interactive Media unit will add Google search boxes to MySpace and other sites, likely by the end of the year, and Google will provide search results and keyword ads targeted to people's search terms. Google will also get first rights to sell any display ads not sold by Fox directly.

Because the primary reason people leave MySpace now is to conduct searches on Google, according to Fox executives, letting MySpace users enter such queries directly on the site allows it to retain visitors longer and thus boost its advertising potential.
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The Globe and Mail

But just as importantly for Google, the deal lets the search company benefit from queries at MySpace instead of seeing those ad dollars go to rivals Yahoo Inc. or Microsoft Corp.'s MSN.

August 8, 2006 at 01:02 AM in Portals | Permalink | Top of page | Blog Home