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News: Google To Pay $900 Million to Float Fox Interactive (MySpace et al) Search

By - August 07, 2006

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Yow. From the Journal, more as I get it.

Google will pay News Corp. at least $900 million to be the search provider on MySpace and other sites. The move — a blow to rival Yahoo — gives Google exclusive access to one of the most popular sites on the Internet, and follows Google’s $1 billion deal to provide searches on AOL.



No story I can find is up yet. I have pinged folks I know on all sides of this deal. Here’s the release.

Udpate: A Google conference call is in progress here.

Eric Schmidt and Ross Levinsohn are on it, am listening now. In short, Google has guaranteed minimum payments based on expected revenues from search placements on MySpace.

The deal is all cash, there are traffic assumptions that they feel “comfortable” with, the deal feathers back if traffic goals are not met. “Our history is that we agree to these structures, and then we do better because of our synergies,” says Schmidt.

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5 thoughts on “News: Google To Pay $900 Million to Float Fox Interactive (MySpace et al) Search

  1. Emmanuel says:

    Hi John

    This is not 900 millions for MySpace.com but for the majority of Fox Interactive Media properties between 2007 to 2010. Fox has also to commit on traffic growth.
    Nice corporate deal anyway

  2. King Troll says:

    So now they can use the cash to buy youtube.com!

    What you think Battelle?

    http://gigaom.com/2006/08/06/youtube-fox-myspace/

  3. marc sobel says:

    reading the NYT article, http://www.nytimes.com/2006/08/08/technology/08google.html
    it seems like again Google has made a deal where the better they execute the more money they make.

    quote:
    Indeed, the sheer size of the MySpace audience presents a challenge for potential providers of advertising. There are so many pages on which to display ads that there may not be enough demand for them from advertisers, leading to low prices. Indeed, many advertisers think the personal nature and frequently risqué subject matter of MySpace pages is not the most conducive environment for plying their wares.

    Eric E. Schmidt, Google’s chief executive, said the company had decided that it would not display ads on every page.

    “We are not going to cover MySpace with ads,” he said, noting that Google carefully analyzes what sort of ads encourage users to click on what sort of pages to produce the most revenue.

    “It turns out the right answer is to show fewer, better ads.”

    Again to me this seems to be one of Google’s basic management principles and a good one. As the old management expression goes, “What get’s rewarded gets done.”

  4. Zenrob says:

    I’d welcome any feedback you may have on my analysis of this deal on my blog:

    http://zenrob.typepad.com/zenrob/2006/08/googles_900_mil.html

    thanks!

  5. TB says:

    The deal between Google and it’s investors will bring them alot of money. However, what kind of inconviences will tbe consumer of Myspace have to abide by. Will they have to pay for service? If so, that will decrease the amount of potential profit that Google would be making by taking over the Myspace empire.