Google to provide MySpace search
News Corp. chose Google to provide Internet search and advertising software for its MySpace.com Web site in a transaction that will generate at least $900 million in revenue over three years for Fox Web sites.
Google will be the exclusive provider of Internet search and advertising software for Fox Interactive sites, including friend-finder site MySpace, Scout.com, a sports site based in Seattle, and IGN, a video-game site, the companies said Monday.
The agreement is a win for Google, which beat out Microsoft and replaces Yahoo! to display ads on MySpace. The companies fought to gain access to the 52.3 million young Internet users who find friends and exchange messages on MySpace, according to market-researcher ComScore Networks.
Google won, in part, because it was the most aggressive and most cooperative suitor, News Corp. executives said in a conference call with analysts and reporters Monday.
"MySpace's audience is highly desirable for a certain class of advertisers," said David Card, an analyst with Jupiter Research in New York. "It's a very good partnership. It's the best search engine and the best social-networking site."
Under the deal, which is set to start in October, Google will run MySpace advertising like it does for sites including Time Warner's AOL and The Washington Post. Google, based in Mountain View, Calif., will sell ads that appear next to search results on MySpace and will also display ads that are linked to the content of Web pages.
Fox Interactive will continue to sell its own banner-type display advertising, and any ad space it doesn't sell will go exclusively to Google's sales team.
Google shares rose $3.30, or 0.9 percent, to $381.25 in extended trading after climbing $4.10 to $377.95 at 4 p.m. in Nasdaq Stock Market composite trading.
"Although this is largely a search deal, we look forward to expanding our relationship across a myriad of areas and partnerships," said Peter Chernin, chief operating officer of News Corp.
Until now MySpace was using technology from Yahoo! and some of its own search technology, Chernin said.
"They've got lots of people and incredible growth, so there should be lots of money there," said Danny Sullivan, editor of SearchEngineWatch.com, a London-based Web site that tracks the industry.
The deal excludes Fox Sports' Web site, which has a partnership with Microsoft's MSN, said Ross Levinsohn, who heads the Fox Interactive Unit. Levinsohn would not say when that partnership was set to end. Adam Sohn, a Microsoft spokesman, declined to comment.
Google bested Microsoft for a second time after Microsoft lost out on a similar deal with Time Warner's America Online. As part of that agreement, signed in December, Google agreed to pay $1 billion for a 5 percent stake in AOL.
Seattle Times technology reporter Kim Peterson contributed to this report.
Copyright © 2006 The Seattle Times Company