See What’s Out There

There was a mega deal signed this week between Google and NewsCorp. This deal centered around… what else… MySpace.com, the NewsCorp social networking behemoth. NewsCorp, which paid about $600 million for MySpace maybe a year ago, did a deal with Google, where Google will run all the ads across the 90 million+ member pages on the site. Google is guaranteeing NewsCorp $900 million in payments. So… not only did Murdoch pay for his MySpace acquisition with a single deal, he paid for 2/3 of all his Internet acquisitions with a single deal. Give that guy a raise.

Google will be running their signature text advertisements within MySpace’s pages. But this one deal makes Google a huge player in banner ad marketing, an area where they haven’t done much to date. MySapce has tens of millions of pages for banner ads as well. Google beat out Yahoo and Microsoft in this and here is a lesson of where technology can make a big difference. Google was able to offer NewsCorp more money because their ad serving software results in better matching of ads to viewers (increasing click-through rates). So Google’s calculation of how much they could pay and still make money was higher than their competitors.

We run Google AdWords and Yahoo ads for clients and we see this every day in the results. Google is more expensive. More clicks, higher click costs and bigger budgets on Google.

Lets hope Google ads make MySpace pages look better.

This entry was posted on Tuesday, August 8th, 2006 at 9:30 pm and is filed under Web Tech. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.