RUMOR MILL
Under Monday's deal, Google will pay News Corp. at least $900 million in cash through 2010 to provide search results and online ads on MySpace, AmericanIdol.com and other websites.
Tuesday, August 8, 2006
MYSPACE AND GOOGLE TEAM UP
Billion Dollar Deal Will Introduce MySpace’s Massive Audience to Google’s Search and Advertising Technology
MySpace and Google have inked an agreement, worth at least $900 million to News Corp., to turn the more than 50 million users of the social networking site into a viable audience for advertisers.
Advertisers fear that big companies might not want their ads to appear next to the racy content generated by MsSpace members. MySpace is looking for Google’s role as its primary ad broker to provide the financial support the site needs to keep its audienceThe deal also shows how Rupert Murdoch plans to recoup the more than $1.2 billion it spent last year to acquire MySpace and IGN Entertainment, which runs the Rotten Tomatoes and GameSpy websites.
"In one fell swoop, we paid for about two-thirds of all of our Internet investments, and we've already paid for MySpace with a 70% premium," News Corp. President Peter Chernin told the L.A. Times.
Experts have questioned the long-term success of social networking sites as businesses.
Under Monday's deal, Google will pay News Corp. at least $900 million in cash through 2010 to provide search results and online ads on MySpace, AmericanIdol.com and other websites run by the Beverly Hills-based Fox Interactive Media.
A Google search box is expected to appear on every MySpace page, and the companies will share the revenue generated every time a MySpace visitor clicks on one of the search-related ads.
The News Corp. deal follows Google's agreement with Viacom make video clips from its TV programs, including Laguna Beach and SpongeBob SquarePants, available to large websites that run ads brokered by Google. Google will share the revenue with Viacom and the website partners.
Analysts called the Fox deal a blow to Google competitors Yahoo and Microsoft. Analysts had seen MySpace as a big revenue opportunity for search partners.
Fox executives say the top reason MySpace users leave the website is to conduct Web searches on Google. They plan to promote the Google search box heavily so that MySpace users stick around and Fox can cash in on the search ads.
Advertisers fear that big companies might not want their ads to appear next to the racy content generated by MsSpace members. MySpace is looking for Google’s role as its primary ad broker to provide the financial support the site needs to keep its audienceThe deal also shows how Rupert Murdoch plans to recoup the more than $1.2 billion it spent last year to acquire MySpace and IGN Entertainment, which runs the Rotten Tomatoes and GameSpy websites.
"In one fell swoop, we paid for about two-thirds of all of our Internet investments, and we've already paid for MySpace with a 70% premium," News Corp. President Peter Chernin told the L.A. Times.
Experts have questioned the long-term success of social networking sites as businesses.
Under Monday's deal, Google will pay News Corp. at least $900 million in cash through 2010 to provide search results and online ads on MySpace, AmericanIdol.com and other websites run by the Beverly Hills-based Fox Interactive Media.
A Google search box is expected to appear on every MySpace page, and the companies will share the revenue generated every time a MySpace visitor clicks on one of the search-related ads.
The News Corp. deal follows Google's agreement with Viacom make video clips from its TV programs, including Laguna Beach and SpongeBob SquarePants, available to large websites that run ads brokered by Google. Google will share the revenue with Viacom and the website partners.
Analysts called the Fox deal a blow to Google competitors Yahoo and Microsoft. Analysts had seen MySpace as a big revenue opportunity for search partners.
Fox executives say the top reason MySpace users leave the website is to conduct Web searches on Google. They plan to promote the Google search box heavily so that MySpace users stick around and Fox can cash in on the search ads.
