New Google-MySpace Deal May Save Google $200M Per Year

JP Morgan increases Q3 revenue estimate

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Two months after their original three-year, $900 million search deal was supposed to expire, there’s word that Google and MySpace have reached a new agreement.  The terms are supposed to be rather different, too, saving Google as much as $200 million per year.

This may not come as a surprise, given that MySpace’s fading popularity almost guaranteed that no company would pay as much to be its default search provider.  Also, even though discussions involving Bing and Yahoo supposedly took place, Google’s decision to extend MySpace’s contract a couple of times made it the frontrunner.

Still, this is the first time we’ve heard any solid figures, and they originate from a reliable source: JP Morgan analyst Imran Khan (via Peter Kafka).

GoogleKafka wrote, "The new deal should save Google $200 million in traffic acquisition costs, Khan says.  And he figures that those savings will show up as soon Google’s Q3 results, due out next week: He’s boosted his net revenue estimate to $5.33 billion, up from $5.32 billion."

So it shouldn’t take long to verify or disprove this rumor.

Meanwhile, Google’s stock is down a small amount (0.59 percent) in early morning trading.

New Google-MySpace Deal May Save Google $200M Per Year
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  • http://www.marketing-lists-direct.com Guest

    Being in direct mail marketing and an avid marketing and mailing list specialist. I would think that google would have gotten more of a savings with facebook beating out myspace in popularity. I am surprised they even renewed that contract.

  • Guest

    @Guest post above…business decisions aren’t made based on popularity. im sure there are hard numbers in terms of traffic/search acquisition to justify cost benefit ratio.

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