Google struck a three-year, $900 million advertising deal with News Corp. to provide search and advertising through MySpace.com, IGN and other Fox Interactive Media Web sites owned by the media giant.
The deal is a blow for Google's chief rival Yahoo. MySpace.com has a search engine at the top of every page, which can be used for either internal or Web searches.
That search engine is currently powered by Overture.com, a Yahoo subsidiary.
Google will use its AdSense program to drive text-based advertising and keyword-targeted ads for Fox Interactive Media's network.
The deal will cover MySpace.com, which had 52 million unique visitors in June and IGN, the leading videogame and entertainment site with 30 million uniques per month.
"We think it's important that we move Google to where the users are, and the users are moving to user-generated content and in particular the sites of Fox Interactive," Eric Schmidt, CEO of Google, told a conference call of analysts and journalists.
Also covered is college and pro sports network Scout.com, movie review site Rottentomatoes.com and men's lifestyle site AskMen.com. Not included in the deal are Fox Sports Interactive and AmericanIdol.com.
Even though MySpace has a search engine from Yahoo, by way of Overture, users apparently often left it to perform searches on Google.
"We find the largest amount of people leaving MySpace leave to go to Google," said Peter Chernin, President and Chief Operating Officer of News Corp.
"Being able to put Google search on the site is the most attractive option for our customers."
The integration of Google's search services across Fox Interactive Media's network is slated to begin in the fourth quarter of 2006.
Google will make a guaranteed minimum revenue share payment to Fox Interactive Media of $900 million, based on Fox achieving certain traffic and other commitments, starting in the first quarter of 2007.
The deal is for three years, nine months.
"If we fail to make those the guarantee gets reduced proportionally," said Chernin. "However, both sides hope we will exceed those expectations."
As part of the deal, Google will provide targeted keyword advertising. Ads will be displayed with search results, and those ads will be determined based on the keywords used in the search.
Google will have a right of first refusal on display advertising sold through third parties on Fox Interactive Media's network, and Fox said it has a fair amount remaining.
At this point, there are no plans for content sharing, and the only details available are for MySpace integration. Where Google will fit into IGN, GameSpy and other Fox properties is still to be determined.
"The deal came together quickly and we will start discussions about other things," said Chernin.
As for doubts Fox could make money out of MySpace, Chernin couldn't help be a little smug.
"Whoever said it remains to be seen whether we can monetise [MySpace], hopefully it's a little clearer this week," he said.
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