Google to provide search for MySpace
The news all over the web today (apart from the Apple announcements, which I’ll get to later today I hope) is that Fox Interactive and Google have signed a $900 million deal for the provision of search and advertising technologies across most of Fox’s sites, including of course the hideous but popular MySpace.
The question is, how good a deal is this for News Corporation and Google? From Murdoch’s perspective, it gives him a large injection of cash, possibly enough to buy up another web property such as YouTube. Speculation over such an acquisition have been doing the rounds for some time, but the sticking point appeared to be how to finance the deal—now Murdoch has the money to potentially buy up a few more sites using cash rather than shares.
From Google’s point of view, they must obviously think that there is more than $900 million of advertising revenue in the deal. The other possible reason is to convert MySpace users from MSN or Yahoo—after all, if a site you visit every day uses one search engine are you really going to bother using another one for your other web searches? Overall, however, I think this is a better deal for News Corp than it is for Google, as I believe the latter will struggle to generate advertising revenues from MySpace where I suspect click-through rates are rather low. On the other hand, it would appear from some of the reports that the deal is based on revenue sharing, so perhaps it’s not quite as big a gamble for Google as it would first appear.