Google And MySpace Extend Ad Deal

MySpace (NSDQ: NWS) and Google (NSDQ: GOOG) are once again extending their search and advertising partnership, this time for several years out. The two companies renewed their initial search and ad deal last August, though for just one month. On top of continuing the existing search and ad arrangement, the new agreement calls for Goolgle to provide more display services to “enhance the rich entertainment content experience inherent on Myspace.”

In a statement, Nada Stirratt, MySpace’s chief revenue officer, praised the deal for expanding MySpace’s display options.

Of course, MySpace and Google have had a fairly complicated relationship over the last few years. In 2006, the two struck a deal that had Google serving as MySpace’s exclusive search and contextual ad sales provider. Although the deal guaranteed payments totaling $900 million from Q107 through Q210, in November ’09, News Corp. warned that revenues would be about $100 million short of that.

Clearly, things have been patched up since then, especially as the ad market recovered this past year. But others still saw an opportunity to replace Google as MySpace’s advertising and search partner. Microsoft (NSDQ: MSFT) was talking to MySpace about the possibility of being handed the exclusive search contract. In the end, Google’s growing display business and its still dominant hold on search, despite Microsoft’s big push behind Bing, was apparently enough to satisfy MySpace in its decision to stick with its current partner.