Google pays up for next generation

Google's $900 million deal with Fox shows that the search giant is willing to pay a hefty amount for the next generation of Internet addicts who tend to socialize as much as they search.

It's been no secret that News Corp been seeking a search partner for the inquisitive MySpace members, who'd been wont to search on Google after socializing on the virtual site. But as the popular social networking sites' traffic surged, so did its ability to leverage its audience. MySpace generated 23 billion pageviews from 45.7 million unique visitors in June, according to Nielsen//NetRatings. sk.com to see who'd offer up, among other things, the highest guaranteed upfront revenue for the MySpace and Fox digital properties' traffic. News Corp set last Friday as the deadline for bids. No one matched Google's offer, though MSN's was competitive.

Obviously, it turns out Google was the most aggressive and willing to capture this exploding network on the Web.

Here are the takeaways. It's great news for News Corp because it's leveraging its online traffic and, if it meets certain thresholds, will definitely beat advertising forecasts set for its digital properties in '07 and the following years. Also, MySpace gets to keep its members on its site searching, because apparently a good portion of them left to search elsewhere.

It's probably good news for Google, since it won't have to pay that revenue unless certain search and traffic. ich had been providing search queries for MySpace, which recently topped the search engine as the most visited site on the Web, based on pageviews. Obviously, MySpace users like to search. According to HitWise, about 10% of MySpace users left the social network and went to Google to search. That's search traffic that Yahoo, MSN or Ask could have had.

It's terrible news for MSN, which is trying to bolster its ad-search business with AdCenter. What was it thinking? To me, the fact that MySpace chose Google isn't that surprising, since I've been writing about this possibility for some time. Whatwill be pretty intriguing to watch from now until the deal is over, is the extent to which Google personalizes the searches on MySpace personal pages and group pages. Now, personal information and search information may actually merge.

Read the rest of my column on MarketWatch.