14 DAY TRIAL // MySpace’s troubles of late may start to look like the good old times once the long-standing Google advertising deal expires next month. The social network has relied heavily on guaranteed ad revenue from Google as part of a deal made in 2006.
At the time, the search company agreed to pay $900 million, over the four-year period, for the exclusive right to power the search features on the site as well as serve the ads. With the deal coming to an end soon, MySpace is looking for ad partners, with Google, Yahoo and others vying for position, but the financial terms are going to be significantly more modest.
News Corp., the company behind MySpace, is said to be in talks with Google, Microsoft and Yahoo, all the major players in the market, for a new search ad deal. The social network is making efforts to turn around the dip in visitors and to reposition itself less as an alternative to Facebook, at which it clearly failed, and more as a niche product, targeting some specific groups and demographics.
That alone is a daunting task, but the prospect of losing some serious revenue streams makes it all the more difficult. That said, MySpace still attracts quite a following and, despite visitor numbers being down significantly from last year, it’s still one of the biggest online properties in the US. So the ad networks are clearly interested, it’s just that the deal is likely going to be at a much lower figure. How much lower, it remains to be seen, but MySpace should really be looking into alternative revenue streams.
MySpace’s deal with Google seems foolhardy now, but the social network was the hottest thing online at that point. Having been recently acquired by News Corp., it seemed like the only way for it to go was up. And it did grow, tremendously, for a few years. Now though, it has failed to meet the deals targets for traffic and other metrics on several occasions which impacted the ‘guaranteed’ sums Google paid MySpace.