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August 7, 2006

Google wins MySpace.com search/ad deal

Posted by Kim Peterson at 2:39 PM

Google landed a MySpace-sized fish today. News Corp. has made Google the exclusive provider of search and keyword-based advertising for Fox Interactive Media's network of properties, including the popular MySpace.com.

Starting in October, you'll begin seeing Google's search bar on Fox Interactive sites, including the Seattle-based Scout.com. Fox Interactive Media will continue selling banner-type display advertising on its sites, but any inventory it can't sell will go to Google to sell after that.

Google will keep an undisclosed portion of the revenue from those advertising sales, but the majority will go to Fox Interactive. Google has guaranteed that Fox will get at least $900 million in minimum revenue-share payments.

The benefits are obvious for both sides. In one fell swoop, Fox Interactive has paid for two-thirds of its Internet investments, executives said in a conference call with analysts and reporters today. And of the people leaving MySpace.com, the biggest chunk left for Google, so integrating Google's technology into the site might keep users on longer.

Google gets to broaden its advertising-sales network. It gets additional revenue from sales, and it gets to tie up with possibly the hottest site on the Web.

FoxSports is exempt from the deal because of a previous arrangement between News Corp. and Microsoft. News Corp. would not say when that arrangement ends. From the conference call, it sounded like News Corp. dangled the broad search/advertising deal in front of Microsoft and Yahoo! as well, but Google was the most aggressive in responding.

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