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International: $900 Million Search Deal Moves Google Onto MySpace

10-August-2006
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International: $900 Million Search Deal Moves Google Onto MySpace

News Corp. is partnering with Google in a $900 million interactive advertising and search deal that will make Google the search engine for most Fox Interactive websites -- including MySpace.com, the companies said yesterday. Under the deal, Google also becomes the prime seller for Fox web ads that Fox itself doesn't sell.

No plans for video advertising

There are no immediate plans for Google to be involved in video advertising but the deal left the window open for such an arrangement as Fox, like other broadcast companies, begins to offer more video online.

"It is truly a landmark deal," said News Corp.'s president-CEO, Peter Chernin, who noted that the $900 million that Google is guaranteeing News Corp. if the Fox Media websites hit certain volume requirement goes a long way toward paying the $580 million it cost to acquire MySpace and other online properties. "We look forward to expanding our relationship into many new areas over years to come," he added.

Google CEO Eric Schmidt called the deal a "marriage of interests."

Under the deal Google will replace Yahoo as the main search engine on MySpace and other Fox Interactive sites including IGN.com, Scout.com and Rottentomatoes.com. The exception is Fox Sports, which has a separate deal with Microsoft and MSN.

Incorporated into every page

A Google search will be incorporated into every page of MySpace.com. In addition, the companies said they will distribute a MySpace.com/Google tool bar.

According to Hitwise, 10.8% of Google's traffic was coming from MySpace.com for the week ended July 29.

Although Fox will continue to sell its own ads, it will turn to Google for what it calls "remnant" ads -- those it can't sell -- and let Google sell those ads as part of a broad demographic push or it can sell them specifically to MySpace or other Fox Interactive users. Fox officials said the company now lets more than a dozen companies sell ads for the sites.

Seamless user experience

Mr. Chernin said News Corp. talked to other search providers, but that the number of users who go from Google to MySpace or back made the prospect of a seamless user experience the clear winner.

"This was the superior search technology. It was a good deal for us and best for our users," he said.

The deal is for three years and nine months and is to launch this fall.

Source: Adage

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