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Tuesday, August 8

Google & MySpace: Internet Giants Join Forces

Remember that little social networking website called MySpace. Well all the major search engines have been vying for the right to service MySpace's search and contextual advertising needs, and it appears that Google has triumphed.

You might recall our recent post "MySpace Climbs to the Top" which outlined the meteoric rise of the social networking site. In July, it ranked as the most popular US site surpassing both Google and Yahoo! for line honors. Needless to say, that sort of traffic represents a lucrative, relatively untapped search audience.

The recently announced multi-year deal will see Google exclusively provide search results and contextual ads across MySpace in exchange for $900 million in guaranteed payments to the Fox Interactive Media Network (MySpace's parent company).

So what does this deal really mean?

Well Google has been notably lacking in the social networking environment. Rivals Yahoo! and Microsoft have ventured far more successfully into the social sphere with their own communities - MyYahoo and MSN Spaces (now Windows Live). These existing Yahoo! and Microsoft communities would have made it a challenge for them to secure the MySpace deal.

For Google, it's a chance to get in bed (metaphorically speaking) with the leading social community site. The value of this deal goes far beyond just increased exposure. The learnings that Google can get from understanding MySpace's visitors and social networking as a whole, will probably outweigh the deal's short term revenue potential.

In terms of advertisers and website owners relying on Google for traffic, the deal does mean that the reach of your search exposure is increased considerably. With an increasingly broad demographic of users, this MySpace deal is definitely a major coup for Google and its advertisers.

Watch this space to see how Yahoo! and Microsoft respond to this mega deal!

3 Comments

At 9:14 AM, Clay Cook said...: Is that $900M in USD and also is it over 3 years or 1 year? Would love to know.
At 12:05 PM, Bill said...: Will being listed on My Space help position on Google?
Bill Beard
www.billbeardcostarica.com
At 1:34 PM, Rene LeMerle said...: Clay: The deal is worth US$900 million and will be the minimum amount payable to Fox Interactive Media between Jan 2007 and the middle of 2010.

Search traffic and associated clicks will dictate whether Google pays out more than this figure over the 3 year period.

Bill: At this stage, I haven't heard any suggestions that a MySpace listing will have an impact on your Google ranking.

That said, there are about 2.5 million MySpace users' sites listed in Google. Maybe there could be some minimal linking benefits. Just unsure what value Google places on MySpace based links.

Considering the demographic that MySpace attracts, many businesses are capitalizing on the social power of the network anyway. The viral opportunities justify having their businesses listed.

If MySpace users are your targets, it surely can't hurt!