Can Google save News Corp from ruining MySpace?

The marketing press is abuzz with news of developments in the impending commercialization of MySpace and YouTube.

News Corp’s acquisition of MySpace is not hard to understand, with MySpace growing with a speed and to a size that dwarfs its online community predecessors. Less clear is exactly what long-term vision News Corp. may have for MySpace, and whether they can exploit it to their satisfaction without causing a turnaround in the site’s popularity.

Recently News Corp. introduced big-name banner ads – in Australia the most-seen banner is from ANZ – though this is a low-dollar commercialization of a website and is certainly the tip of MySpace’s commercial iceberg. In August MySpace penned a US$900 million deal with Google for provision of searching and text advertising on MySpace.

(Note that current MySpace pages and searches are littered with sponsored links provided via Overture, a Yahoo company. The recent developments must suggest this content is outgoing, unless MySpace is encumbered by a deal with Yahoo that will extend that connection in the Australian market.)

This is a partnership that makes sense for News Corp.; with MySpace earning virtually nothing while having tremendous and growing membership, high user involvement and strong user interactivity features, there is much potential. Google reaped over US$6 billion of pay-per-click advertising revenue in 2005, making it clear that search is the current powerhouse for steering traffic and for generating ad revenue. Who better than Google to help exploit the MySpace?

Perhaps a more important question, though: Does News Corp understand social networks and their itinerant nature well enough to avoid sending annoyed MySpace users flocking to the endless other sites that will welcome them? Perhaps, if its partnership with Google is more than a plan to soak MySpace with ads. With some Google-style wisdom, treating audiences kindly with streamlined, high-quality interfaces and functions and without a visual overhead of annoyances and superfluous content, MySpace could become the giant it pretends to be.