UPDATE 1-MySpace and Google reach new search, ad deal

Thu Dec 16, 2010 12:15pm EST

* News Corp and Google renew search and ad agreement

* Terms of the multiyear deal were not disclosed

NEW YORK Dec 16 (Reuters) - News Corp's (NWSA.O) social networking site MySpace and Google Inc (GOOG.O) have reached a multiyear search and advertising agreement, ending months of uncertainty surrounding the partnership.

Under the new deal, Google will power MySpace search results and search advertising as well as provide additional display ad services.

Terms of the agreement were not disclosed.

Under a 2006 deal, Google had guaranteed $900 million to News Corp for the right to sell advertisements related to user searches on MySpace and some other small News Corp websites over three years.

That deal expired in June but was temporarily extended as News Corp and Google continued talks. It was not expected that News Corp would be able to sign an agreement as lucrative as the original deal. [ID:nLDE68001L]

News Corp also reached out to Microsoft Corp (MSFT.O) and Yahoo (YHOO.O) about powering search advertising on MySpace.

News Corp acquired MySpace in 2005 for $580 million after News Corp Chief Executive Rupert Murdoch famously swooped in to beat rivals like Viacom VIAb.N in the bidding.

But since then, the website became increasingly irrelevant as a social network for many users as they migrated to Facebook.

MySpace recently relaunched as a social entertainment site rather than a direct social networking rival to market leader Facebook.

News Corp COO Chase Carey told Reuters in November that the company is open to a sale or partnership with MySpace.

"There are opportunities here to do 20 things (with MySpace) but that doesn't mean you're going to do any of the 20. If there's something there that makes sense you ought to think about it," Carey told Reuters recently. [ID:nN29231678] (Reporting by Jennifer Saba, editing by Matthew Lewis)

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