Reuters on MySpace Google Deal

Google said it had agreed to pay Fox at least $900 million in revenue share payments based on certain traffic and other commitments promised by Fox over the next three years and nine months, beginning in October.

The deal, signed on Monday, runs through the end of calendar year 2009, which is halfway through News Corp.'s fiscal year.

Close to 11 percent of all traffic to Google.com from U.S. Web users comes from the MySpace domain, according to Bill Tancer, an analyst with online audience measurement firm Hitwise

With one transaction, the Google deal helps to pay for most of News Corp.'s Internet investments, News Corp. executives said. Less than a year ago, the company paid $580 million for MySpace, part of a $1.3 billion spending spree to buy Web properties.

With barely enough time to figure out what else they could do together, executives said they planned to discuss expanding the partnership in areas such as potential content licensing or video search and advertising.

Initially, Google-branded search bars will appear on all pages of MySpace, along with more than a dozen other Fox Interactive Web properties, including its IGN.com for video gamers and RottenTomatoes.com for video lovers, they said.

But making money off the prodigious traffic the site generates has been more difficult. For all the headlines the top ranked site has generated, Fox Interactive Media properties are expected to take in about $500 million in revenue in fiscal 2007.

News Corp., which also owns 20th Century Fox and the Fox cable news network, is expected to generate about $27 billion in the same period.

"We think it's important to move Google to where the users are. They are moving to user-generated content and to precisely where the Fox properties are," Google Chief Executive Eric Schmidt said on the conference call.