UPDATE 1-MySpace to test news service to boost ad revenue

(Adds background and executive's quote)

By Kenneth Li

NEW YORK, April 19 (Reuters) - News Corp.'s (NWSa.N: Quote, Profile, Research, Stock Buzz) MySpace social network plans to test a service on Thursday that scours the Web for news stories and lets users rate them, aiming to attract more advertisers to the Rupert Murdoch-controlled company.

The service, called MySpace News, resembles a mix of Google Inc.'s (GOOG.O: Quote, Profile, Research, Stock Buzz) Google News, which collects stories and arranges them based on thematic similarities and Digg.com, which displays stories suggested by its readers and displays them according to their popularity ranking, executives said.

MySpace News is an attempt by the company to keep its more than 100 million unique visitors, according to comScore Network's March figures, on the popular social network site longer.

The service adds a social element to traditional news consumption by giving readers the ability to determine what becomes the top news on MySpace.

The launch is also part of News Corp.'s efforts to aggressively court entertainment and other types of content from other media sources as it seeks to bolster a leading position on the Internet, executives have said. News Corp. expects to generate over $500 million in revenue from its digital businesses this fiscal year.

Before the launch, MySpace users would have to leave the service to read news on the Internet. MySpace users on average spend about 10 minutes per visit in the United States and visit the site about 19 times per month, according to comScore.

The news service, long rumored, will have 25 main topics and about 300 sub-categories ranging from celebrities and gossip to autos and fashion.