Tuesday, August 08, 2006

Google Flexes its Muscle

Seems Google just landed a deal with MySpace to provide Internet search and keyword advertising software to the tune of $900 million in revenues (over 3 years) for Fox Interactive's new baby.

As a result of this sweet deal (for Fox), Google beat out Microsoft and usurped Yahoo! for access to MySpace's 52.3 million users.

My question: did Google grossly overpay for MySpace? After all, it has yet to be seen whether MySpace's torrid growth is sustainable over the long term. Google may be celebrating now, but Microsoft may have the last laugh if this proves to be a short-sighted move. But regardless of what happens, you know these two guys in the photo are laughing all the way to the bank...

The good news is Google didn't commit too many years to this deal. So perhaps that's why they were willing to go over the top with a bid, knowing that 3 years in the grand scheme of things isn't that long. Of course, 3 years for anything on the Internet is still pretty long. ;)

My next question: we've got Web 2.0...but are we headed towards a new Bubble 2.0?

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