Google has signed a deal that will give it exclusive rights to provide paid-search advertising and some display ads to MySpace.com, the social-networking site owned by News Corp.’s Fox Interactive Media.
The multi-year deal will make Google AdSense the exclusive distributor of text-based pay-per-click ads to MySpace.com and some of Fox Interactive’s other media properties, which include Fox.com, Foxsports.com, AmericanIdol.com and gaming network IGN.com. Google will also have first crack at display advertising inventory on those Web properties and will replace Yahoo! as the search engine on MySpace.
About 8.2% of Google’s search traffic already comes through referrals from MySpace, according to Hitwise.
The agreement calls for Google to guarantee a minimum in revenue-sharing payments — as much as $900 million from 2007 to 2010, according to press reports–in return for guaranteed traffic volume from Fox Interactive.
In June, Fox Interactive chief operating officer Peter Chernin announced that his division was looking to bring in a search partner to monetize the power of MySpace’s popularity. The site had 45.8 million unique visitors in June, a year-over-year increase of more than 280%, according to Nielsen NetRatings.
The deal also gives Google a potential test bed in which to study social networking and consumer-generated media. Rival Yahoo! has made more inroads with image search Fickr.com and social tagging site del.icio.us, both of which it owns. Microsoft too has its own MSN Spaces (now Windows Live Spaces) social network.
“The real potential home run of this deal is combining Google’s technology with the additional information News Corp. has about our Web users,” Chernin said in a conference call following the deal announcement.
“We were amazed at the power and growth of MySpace,” said Eric Schmidt, Google CEO, during the call. “We think it’s important to move Google to where the users are. And the users are moving to user-generated content, and in particular to the sites of Fox Interactive.”
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