15 June 2006 | Author: David Fothergill

My - Very Profitable - Space

MySpace is targeting a partnership with the major search engines in an effort to increase revenue from online advertising.

Often in life it is best to realise what you do well and what you should let others do for you. This thinking would seem to lie at the heart of News Corp's decision to look towards 'The Big 3' search engines to help turn it huge traffic volumes into huge piles of cash. At a Deutsche Bank conference News Corp executive Peter Chernin stated that MySpace, "will probably look to auction off our search business to one of the three big search players." No doubt the prospect of supplying search results and paid listings to MySpace's 73 million (and counting) registered users will a very interesting one for Google, Yahoo! and MSN.

Whoever eventually wins the auction to act as the strategic partner will be able to serve paid search listings alongside the organic results, in the same way that they currently do on their own results page, thus generating significant amounts of revenue (in the same way they do on their own search results page).

At present the search facility is greatly underused on the social networking site. And, whilst MySpace is one of the most viewed websites in the US, it only makes up around 0.6% of the total search figure. Given that the most popular destination for users exiting the site is Google, we can safely say that it is not a lack of desire for search that gives MySpace such a figure. The major reason for this is most likely that the MySpace search button is trying its level best not to stand out from the crowd of other buttons on the site. This is an issue was addressed by Chernin at the same conference by stating that they, "will redesign the page to make search more prominent." This, in my opinion, will not be a hard thing to do.

So, who will win this battle to get into bed - metaphorically speaking - with MySpace? Microsoft is currently on a mission to challenge Google's supremacy and share of the search market, and as such might be willing to pay over the odds to secure a deal that would enhance their prominence. Yahoo! currently supplies both search results and sponsored listings to the site, although the sponsored listings come via one of Yahoo!'s distributors, and may be loath to lose this source of traffic. On the other hand, Google (as the favoured exit page) could also see themselves as losing out once MySpace users search needs are satisfied on site. It would also suit Google's use of video ads etc, and their stance on the use of relevant, unobtrusive ads could sit well with the mostly young, net savvy users on MySpace.

Early reports state that it will be a two horse race between Google and MSN (or Microsoft Live). This scenario is similar to the one last year when MSN lost out to Google when trying to strike a partnership deal with AOL, so maybe they will go that extra mile to make sure this doesn't happen again and at the same time send a bold message to Google that they are right behind them.

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