08 August 2006 | Author: D. Miller

Google to Power MySpace search functionality

Google is set to become the exclusive provider of internet search and advertising software after closing a deal worth an estimated $900 million with Fox Interactive Media, the web arm of Rupert Murdoch's News International, to provide internet search and advertising software to its sites including the social networking giant MySpace.

After beating off competition from Microsoft, Google is set to replace Yahoo! in placing ads on the MySpace site. News Corp. executives stated in a conference with analysts and press that Google won, partially, as it was the most competitive and aggressive suitor.

With access to the 52.3 million young internet users who currently utilise MySpace to exchange messages and find friends, the deal allows Google access to one of the most desirable advertising audiences online today.

The agreement allows Google to place ads next to the search results on MySpace along with ads that are linked to the content of web pages. While Fox will continue to sell its own banner display advertising, the agreement also provides Google with exclusivity to any ad space on the site which does not sell.

"Our partnership with Google underscores News Corp's continued evolution to become a powerful force in the digital media marketplace," said Peter Chernin, President and Chief Operating Officer of News Corporation.

Under the terms of the agreement it is known that Google must make guaranteed minimum revenue share payments to Fox interactive Media totaling $900 million based on the pretence that Fox will achieve certain traffic and other commitments. These share payments are expected to being in the first quarter of 2007 ending in 2010. It is predicted that the adverts agreed under the deal will begin to appear as early as October this year.

"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.

Alongside MySpace other Fox interactive Media sites which are set to benefit from this deal include IGN, Scout.com, rottentomatoes.com, AskMen.com, Gamespy.com, Fileplanet.com, Teamxbox.com, 3dgamers.com, Gamestat.com and Gamermetrics.com.

Analysts who have been following the deal predict that the partnership will be a success. As Google shares rise again to $3.30, or 0.9 percent, to $381.25 in extended trading, David Card, an analyst with Jupiter Research in New York states: "It's a very good partnership. It's the best search engine and the best social-networking site."

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