August 9th, 2006
Google won over MySpace with a hefty $900 million revenue-sharing deal that will allow the search engine to provide its search and advertising services to the latter’s 70 million-plus users. That also means MySpace dumping its current ad provider Yahoo! who also made a bid but fell short to that of Google. With the social network being the most accessed website in the US, Google is given wider exposure to a younger audience and more revenue opportunities through its AdWords clients.
The winner? Google. Although Myspace’s dreams of making good money had just come true, its long-term prospects are still put into question. Remember. It’s Google using MySpace to make money, NOT the other way around. The numbers tell the story. Ratings have it that MySpace’s traffic grows an astounding 300% annually, easily overtaking Google. So if you think I’m insinuating that Google’s merely using MySpace
and stopping it from making its own search engine, you’re right.
Certain terms of the deal stipulate that the $900 million sum be paid in three years as long as MySpace does its part in keeping traffic up and enticing new users, among others.