Tuesday, August 08, 2006

MySpace, Google Ink $900 Million Search Deal

IN A DEAL THAT WILL vastly expand Google's available ad inventory, Fox Interactive Network has tapped Google to power paid search on all of the company's Web properties, including the hugely popular social networking site MySpace.com, gaming site IGN Entertainment, and movie site Rotten Tomatoes.

Google has agreed to pay Fox at least $900 million between the first quarter of 2007 and the second quarter of 2010, provided that the Fox sites maintain certain minimum traffic levels. Fox also will place Google search bars on every MySpace page, starting in the fourth quarter.
The deal also calls for Google to provide display ads to Fox, and gives Google the right of first refusal on all display ads sold through third parties. Previously, Yahoo powered search on MySpace.

Fox Interactive President Ross Levinsohn said Google will provide several new search functionalities to MySpace--including category search, blog search, Web search, and search throughout the entire site--and will also provide a way for Fox to make some money off all the traffic MySpace generates. "This is an opportunity to monetize that traffic that we didn't have before," he said in a conference call Monday afternoon.

Industry observers said the deal is a huge win for Google, by potentially expanding its search volume. MySpace alone garnered 52.3 million unique visitors in June 2006--up 196 percent from the same period a year ago, according to comScore Networks.

"It's an enormous amount of search volume," said Greg Sterling, principal analyst for Sterling Marketing Intelligence, referring to potential searches on MySpace. "Obviously, Fox is trying to generate as much revenue from that site that they can, and this is a very direct, plug-and-play way to do that."

David Berkowitz, director of strategic planning for search engine marketing firm 360i, added that Fox was "giving Google one of the best inventory sources out there right now."


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