Google to Syndicate Search and Ads to MySpace

  |  August 8, 2006   |  Comments

Google will pay $900 million to provide search results and ads on numerous sites owned by Fox Interactive Media.

Google signed with Fox Interactive Media (FIM) to be the exclusive provider of search results and associated paid listings on a majority of the News Corp. unit's Internet properties, including social networking mammoth MySpace.

Google has agreed to pay FIM at least $900 million between January 2007 and mid-year 2010, providing its properties meet certain traffic and related commitments. Ad products will include contextual and keyword-targeted listings through its AdSense program, and Google will have right of refusal on display ads trafficked through third party networks or ad reps. Properties served under the deal include IGN.com, Scout.com, AskMen.com and Gamespy.com.

Microsoft, Yahoo and IAC/InterActiveCorp had all reportedly vied for the MySpace business.

The deal appears to allay concerns that News Corp. lacks a viable means to monetize the MySpace property. On a conference call discussing the agreement, President and COO Peter Chernin insisted the company has already made strides in revenue growth on display ads and cross-network promotion.

"We are pretty confident in our ability to monetize MySpace on our own properties already," he said. "We think we'll do a much better job on remnant, which is a huge opportunity for us [and] we've made huge progress on display in the last month or two."

The deal apparently came together quickly and was signed yesterday, only a few hours before being announced, though the companies have been in talks for approximately a year.

"Peter and some of the other leadership had been chatting with Google for maybe a year on and off about a deal," said Google CEO Eric Schmidt. "They're very clever. It just so happens they had a management meeting last week nearby, and Peter set a deadline."

Hitwise reported last month MySpace accounts for 4.4 percent of all U.S. Internet traffic and 80 percent of online social networking activity. Other sites in FIM's network include Foxsports.com, Scout.com and IGN.com.

"This agreement demonstrates our commitment to bring the same innovation to monetizing user-generated content that we brought to search advertising,” said Omid Kordestani, Google's SVP of global sales and business development, in a statement.

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ABOUT THE AUTHOR

Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

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