Google lands MySpace and MTV deals

08-08-2006

by Ciara O'Brien

Search giant Google has secured search rights for social networking site MySpace in a USD900 million deal.

The agreement with MySpace owner News Corp is part of Google's expansion of its AdSense network. The deal will allow Google to target a large number of web users through its AdSense model which is a contextualised search function allowing web masters to share revenue if they publish Google sponsored links on their sites.

Google will also provide search and keyword ads to a number of News Corp's Fox Interactive web properties besides MySpace, such as IGN, Rottentomatoes.com, Gamespy.com, AskMen.com and Fileplanet.com.

The deal is worth at least USD900 million to News Corp and Google will make the payments subject to certain targets being met by Fox Interactive, including traffic figures for the period covering the first quarter of 2007 to the second quarter of 2010.

"Our partnership with Google underscores News Corp's continued evolution to become a powerful force in the digital media marketplace. To have come this far and gained this much momentum in just over a year is truly remarkable," said Peter Chernin, president and chief operating officer of News Corporation.

Chernin said the move was just one of "many steps" the firm planned to take with Google.

MySpace's popularity could prove lucrative for Google's advertising programme, and is a considerable victory for the firm over rivals such as Yahoo who were reportedly angling for an agreement with MySpace.

The deal also calms analysts' fears that News Corp would find it difficult to make money out of MySpace. A year ago MySpace was estimated to be making up to USD3 million per month in advertising, but analysts have now estimated that the new deal could bring in USD25 million per month based on search revenues alone.

"We believe that our innovative technologies will be of real benefit to Fox Interactive Media's growing number of users," said Eric Schmidt, chief executive of Google.

"MySpace.com is a widely acknowledged leader in user-generated content and incorporating search and advertising furthers our mission of making the world's information universally accessible and useful," he added.

Google has also signed a deal with MTV, which will see Google distribute ad-supported video content from MTVN to website publishers. Programming such as MTV's Laguna Beach and Nickelodeon's SpongeBob SquarePants will be distributed over Google's ad network.

"Collaborating with Google gives us a terrific opportunity to take our content and distribute it even more widely on the web in a seamless and targeted way," said Tom Freston, president and chief executive of MTV parent Viacom.

"This deal fits in perfectly with our strategy to deliver the best content to our audiences, wherever they are."

The agreement marks a number of 'firsts' for both firms: the first time integrated video programming and advertising is available to the AdSense network; and the first time that MTV Networks has made its programming available to viewers outside of its own websites.

Google is, understandably, enthusiastic about the deal and it appears that this may signal the first of future syndications deals for the firm.

"We're excited to work with MTV Networks on new ways of distributing its content to consumers via the internet and on Google Video," said Schmidt.

"With the combination of our video technology, and extensive advertiser and publisher network, Google is in a leading position to help content owners, web publishers and advertisers generate interest and increase revenue opportunities."

The firms also announced that full length episodes of MTV Networks' programs will be available for download through Google Video, for USD1.99 per episode, including content from Comedy Central, MTV, MTV2 and Nickelodeon.