TAC: How Much Will Google Pay MySpace?
MediaPost (reg. req'd) discusses the talks between MySpace and Google and Miscrosoft regarding a search/paid search partnership deal. MySpace wants to better monetize its page views and Google apparently gets a whopping 8.2% of its traffic from the social network. In fact, according to the article (citing Hitwise), MySpace is the single greatest source of traffic to Google, what happened to AOL?
Speaking of AOL, Google paid $1 billion to retain that relationship last December. In the wake of yesterday's eBay-Yahoo! "alliance," Microsoft has got to be feeling like it needs to strike a high profile deal or two to gain some traffic/distribution (especially given the new market share data). But Google is clear on what's at stake here. It probably won't let its number one traffic source get away, unless Microsoft is willing to pay a premium to Fox to displace Google. We'll see.
How much is MySpace traffic worth: $100 million, $500 million, $1 billion . . . or more? Talk about your "traffic acquisition costs!"
May 26, 2006 at 4:25 pm
My understanding is that AOL didn’t send traffic to Google per se, the statistics cited when that deal was being promulgated had to do with the number of Google-powered and Google-monetized searches performed on AOL itself, while the MySpace numbers have to do with MySpace users going directly to Google and Google properties.
May 26, 2006 at 4:36 pm
Fair enough. And good point. At a high level, however, it amounts to the same thing. Searches driven by MySpace represent page views and corresponding monetization opportunities for Google.
May 26, 2006 at 5:18 pm
A couple of points -
- Remember that Google is also paying Dell near $1B for placement
- MySpace may REFER the most traffic to Google, but it’s misleading to call them “the single greatest source of traffic”. I’d imagine that the toolbar deals (i.e Firefox) produce more, and certainly Google.com type-ins are bigger.
May 26, 2006 at 5:35 pm
Thanks for the Dell number. Would be interesting to know re the toolbar deals.
May 28, 2006 at 6:33 am
The myspace.com statistic is incredible. It’s the first one I’ve heard in months that suggests that google’s lead in search is not in fact insurmountable. On the other hand, the trouble with most of these statistics is that they tell us nothing about the types of searches being conducted. At the end of the day, all searches are not the same. Which searches lead to clickthroughs that make contextual advertising worth anything? For example, you deciding to research barbeques online leading to some variant of e-commerce is pretty important. However, do kids searching on myspace.com suggest anything about the intrinsic (economic) value of their searches? Additionally, myspace.com doesn’t brand any of their searches, meaning they are available to the highest bidder.