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MySpace seeks link with Google or Microsoft

MySpace, the fast-growing “social networking” site, is in talks to forge a internet search link with either Google or Microsoft, in a move that would confirm the emergence of Rupert Murdoch’s internet site as a significant new power online.

The rapid growth of MySpace has turned it into one of the most attractive potential allies for search engines, which are hunting for new online audiences for their search-related advertising.

The internet site, bought by News Corp last year for $580m (£310m) and which now has nearly 80m registered users, is discussing an alliance that would let one of the search giants supply internet searches on its pages, along with adverts tied to results, according to people familiar with the discussions.

Such deals typically involve the two sides splitting advertising revenues, with the lion’s share going to the website that delivered the audience.

“They are looking for a partner and trying to figure it out,” said a senior executive of one of the internet search companies. “They have a good opportunity to increase the revenue on that property.”

The rivalry over MySpace is expected to echo the competition between Google and Microsoft last year over a link with AOL, which was eventually won by Google after the search company agreed to invest $1bn in the business.

Google and Microsoft are believed to be talking to MySpace. Yahoo is believed to be less interested. The search market is dominated by Google, which in April increased its share of US searches to 43.1 per cent, according to comScore Networks. Yahoo’s share was unchanged at 28 per cent and Microsoft’s share fell slightly to 12.9 per cent.

The rapid growth of social networking sites such as MySpace and Facebook has threatened to tip the balance of power on the internet away from traditional portals and search engines.

Their potential to become the places where many young people spend most of their internet time could make them the “gatekeepers”, or the entry point for online activity.

The rise of the social networking sites has already forced the established internet powers to revise their views of how new audiences will emerge on the internet.

“We’ve looked at this carefully, these online communities will evolve and search will be part of it,” Eric Schmidt, chief executive of Google, said earlier this month. “There’s not going to be a single winner.”

Steve Ballmer, chief executive CEO of Microsoft, added: “All the analysis suggests that’s where all the growth will come from.”

MySpace.com declined to comment on the status of its search negotiations.

Ross Levinsohn, president of Fox Interactive Media, the News Corp internet division of which MySpace is the cornerstone, said last week that improving the technology underpinning the site and making it easier for advertisers to access its users was “still our highest priority”.

MySpace seeks link with Google or Microsoft - Tuesday, May 23, 2006 -

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