Google cooperates with MTV and MySpace
With new major deals, the internet giant has tapped into additional revenue streams online: Google is authorized to distribute MTV programming segments and videos—including advertisements—through its advertising network. In addition, Google will provide the default search function for most News Corp. websites, including MySpace.
Internet giant Google has opened up further sources of income on the web with new big deals: An agreement has been reached with Viacom, the parent company of MTV, that Google will redistribute program parts and videos including advertising from MTV to website operators in return for payment. MTV reserves the right to decide which sites from Google's advertising network may show the channel's program parts. This is the first time that Google has distributed not only text ads but also video content via its advertising network. The internet giant is increasingly working to reduce its reliance on text ads and to enter the advertising market, and the deal with Rupert Murdoch's News Corp. provides for Google to be the only search engine to appear on MySpace and most other News Corp. websites.
In return, Google is guaranteeing News Corp. at least 900 million dollars in advertising revenue, which the group will generate in the period between 2007 and the second quarter of 2010 - via News Corp. websites. Nevertheless, it is a successful deal for News Corp. boss Rupert Murdoch, who should soon have amortized the 580 million dollars previously invested in MySpace - with interest.
As far as MySpace is concerned, the agreement with News Corp. stipulates that the Google search function will be integrated on every page of the MySpace portal from October onwards. As MySpace already has almost 100 million users, the advertising revenue via Google's AdSense advertising system is likely to be considerable. The Internet giant has thus snatched what analysts estimate to be the largest advertising contract on the Internet from under the noses of its competitors Yahoo and Microsoft. News Corp. and Google have announced that they are discussing an expansion of their cooperation.
