Google, News Corp. ink search, ad deal

MySpace offers a mix of features _ message boards, games, Web journals _ designed to keep its youth-oriented visitors clicking on its advertising-supported pages. Users stay connected by adding others as "friends" and expand their networks by meeting friends of their friends.

Google will now power MySpace's in-house search, making friends and groups easier to find, said Ross Levinsohn, president of Fox Interactive Media.

Besides MySpace, the deal covers most of Fox's other sites, including IGN, AmericanIdol.com, Fox.com and Rotten Tomatoes. Fox Sports is not included because News Corp. already has a deal with MSN.

News Corp. executives said 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. Negotiators worked nearly round the clock over the past five days.

Both sides said they expected additional deals beyond search, "many of which we can only guess on right now," Schmidt said.

Google and MySpace have been developing similar services, including Web journals, video and instant messaging. MySpace is planning to develop a browser toolbar that will integrate Google searches.

MySpace currently uses search results from Yahoo Inc. under a smaller deal reached before News Corp. bought MySpace and Yahoo acquired search-ad company Overture Services.

In a statement, Yahoo spokeswoman Joanna Stevens said the Google deal was great for Fox but wasn't one in which Yahoo had an interest.

"We did not see this opportunity as financially prudent or in the best interest of our advertisers," she said.

MSN officials had no comment.

Danny Sullivan, editor of the industry newsletter Search Engine Watch, said Google made the most sense as a partner because both Yahoo and MSN have competing social-networking services.

Google runs Orkut but does not aggressively promote it. It has a 5 percent ownership in Time Warner Inc.'s AOL, but AOL officials have said they weren't trying to unseat MySpace with its new AIM Pages service.

Tim Armstrong, Google's vice president of advertising sales, said Fox sales representatives will likely target large companies, while Google focuses on small and medium-sized businesses. He said advertisers will have a choice of targeting MySpace specifically or reach Google's broader ad network.

Shares of Google increased $4.10, or 1.1 percent, to $377.95 on the Nasdaq Stock Market, while shares of News Corp. rose 2 cents to close at $19.76 on the New York Stock Exchange. In late-session trade, Google added 1 percent, while News Corp. gained 1.2 percent.

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