Google (GOOG) probably thought it had a deal all wrapped up to be the sole provider of search and search based ads to News Corp’s (NWS) huge social network site, MySpace. They do have a deal to use Google’s advertising system to provide MySpace and Google has paid a minimum $900 million for the privilege.
But, MySpace wants to make sure the Google deal does not block other e-commerce partnerships. And, that is a problem for Google. The big search company probably hoped that none of its rivals could get in a side door.
Well, the folks at Ebay (EBAY) found that side door. It appears that they will provide a system for MySpace users to buy and sell goods using the auction company’s technology and its PayPal e-commerce payment system. Google is trying to get customers for its own payment system, Google Checkout, so this deal would be a big blow. Very big since MySpace is one of the most visited websites in the world.
Google still gets to have its ad brokering deal with MySpace and should reap a bundle. But, the fruits of the partnership just got a lot less attractive for the search company.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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