Addition Through Subtraction: Wall Street Gives Google a MySpace Bump
As Kara Swisher has reported, Google (GOOG) and MySpace owner News Corp. (NWS) are close to a “realistic” search deal to replace the famous three-year, $900 million pact signed during the Web 2.0 boom. The old deal expired this summer, and the two companies have been negotiating a replacement while working through a couple of one-month extensions.
News Corp., which also owns this Web site, doesn’t have much leverage here. Its once-hot social network has long been eclipsed by Facebook, and Microsoft (MSFT) doesn’t seem inclined to make a competitive bid for the MySpace business.
Translation: 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.