August 8th, 2006
Google: MySpace savior?
“In one fell swoop, we have paid for two-thirds of our Internet acquisitions,” said Peter Chernin, President of News Corporation, during the company’s joint conference call with Google Management yesterday.
In “Google hits Web 2.0 trifecta: AdSense powering MySpace, YouTube, Digg,” I report on the multi-year deal for Google to be the exclusive search and keyword targeted advertising sales provider for Fox Interactive Media Web properties, including MySpace.com:
Google will be obligated to make guaranteed minimum revenue share payments to Fox Interactive Media of $900 million based on Fox achieving certain traffic and other commitments. These guaranteed minimum revenue share payments are expected to be made over the period beginning in the first quarter of 2007 and ending in the second quarter of 2010.
Listening to the joint conference call for financial analysts and press, however, the lack of enthusiasm for the $900 million deal was palpable.
The profitability of MySpace was questioned, as well as the quality and salability of its advertising inventory.
By seeming to use the Google revenue share deal to “justify” its billion dollar plus investments in Web properties, News Corp did not provide a ringing endorsement for the stand alone viability of its Internet sites.
MySpace’s vulnerability, and subsequent reliance on Google, once again illustrates “Google AdSense: Web 2.0 biggest winner”
