20 July 2010

MySpace Said to Hold Ad Talks With Microsoft, Yahoo, Google

Bloomberg / Business Week

News Corp.’s MySpace, seeking to replace a search advertising contract with Google Inc. that expires in August, has held talks with Microsoft Corp. and Yahoo Inc., according to a person familiar with the company’s plans.

Any deal would carry a substantially lower price than the $900 million Google agreed to pay in 2006 to place search ads within the social-networking site, a person with knowledge of the discussions said. MySpace also remains in talks with Google about extending their partnership, the person said.

MySpace has struggled to maintain ad revenue during an exodus of users to Facebook Inc. and the departure of key executives. Bought in 2005 for $580 million in cash, MySpace lost its status as the world’s top social-networking site in 2008. News Corp. Chief Executive Officer Rupert Murdoch said last year that the site would fall short of traffic commitments to Google, lowering income on that deal by $100 million in 2009.

“We’re currently talking to multiple providers across the many facets of search to bring our users the best possible search experience in a social environment,” said Tracy Akselrud, a spokeswoman for Beverly Hills, California-based MySpace, who declined to name specific companies.

Microsoft is looking to boost users and ad revenue for its 13-month-old Bing search engine, which claimed 12.1 percent of searches in the U.S., compared with Google’s 63.7 percent, according to data tracker ComScore Inc. Microsoft has forged a separate agreement to handle searches on Yahoo’s site -- a deal that’s scheduled to take effect by December.

Pete Wootton, a spokesman for Redmond, Washington-based Microsoft, declined to comment on negotiations with News Corp. May Petry, a spokeswoman for Yahoo in Sunnyvale, California, and Jane Penner, a spokeswoman at Mountain View, California-based Google, also declined to comment.

MySpace Co-President Jason Hirschhorn left in June, becoming the most recent high-level executive to depart the business. He had taken the co-president role in February, after Owen Van Natta stepped down as CEO.

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