MySpace has a new partner

News Corp MySpace, owned by Rupert Murdoch's News Corporation, has struck a four year deal with its new partner Google Inc. The deal enables Google to provide search listings for the social networking site. The deal will mean atleast $900 million payment to Fox web sites.

The agreement was announced after the market was closed and it will also provide Google to provide search advertisement services for a bulk of Fox Interactive media web sites, which are possessed by news corporations. The deal was struck yesterday after a long weak of negotiations. It is a first step in the strategic partnership between two of the internet's biggest players. News Corp executives said that they had discussions with some of Google’s rivals, which they refused to name, and considered building their own search engine, but quickly concluded that Google was the best partner because the two companies shared similar consumer-centric goals.

According to the agreement, Google search boxes will be added to the web pages set up by MySpace's 100 million registered users and to other websites including RottenTomatoes.com and AmericanIdol.com by News Corp's Fox Interactive Media. Visitors will be able to use Google for both internal site searches and full web searches.

Google has replaced Yahoo Inc., which was the partner of MySpace earlier. MySpace is one of the most popular sites on the internet. The companies revealed that the exclusive provider of text-based advertising and keyword targeted ads will be in the hands of Google and it will achieve this through its AdSense program.

Google agreed to make guaranteed minimum revenue-share payments to Fox Interactive Media of $900 million in cash under the deal. The payments are expected to be made from the first quarter of 2007 through the second quarter of 2010.

The payments are contingent upon Fox meeting traffic and search thresholds, and will be adjusted accordingly based on the actual traffic and search activity. However, the Company executives would not say what those thresholds are.

News Corp’s chief operating officer, Peter Chernin said that there are traffic assumptions that are achievable and they are comfortable to hit those numbers.

It is still unclear how many search queries are conducted by MySpace, but it is clear that the members tend to leave the social service site and search. It was found out that almost 11% of the site’s traffic left the social network and went to Google.

As the social service sites provide a fast growing network now, Google had declared a few months back that it will provide search for social networking sites.

Rich Greenfield, an analyst said that MySpace will generate $200 million in sales by the end of calendar 2006, and $300 million by the middle of next year, the end of News Corp's fiscal 2008.