Rumor Of The Day: Will News Corp (NWS) Walk Away From Google (GOOG)?

February 25, 2008 by Douglas A. McIntyre

Techcrunch is reporting that News Corp (NYSE: NWS) is negotiating with Google (NASDAQ: GOOG) to get out of a deal which allows the big search company exclusive rights to sell text ads on MySpace, the largest social network.

If the negotiation is successful, Microsoft (NASDAQ: MSFT) would take Google’s place handling the MySpace inventory.

The Google deal called for it to pay a minimum of $900 million to News Corp. If that price is too steep why would Google not simply try to cut a new deal at a lower number? Letting the inventory at one of the biggest websites in the world go to rival Microsoft simply doesn’t make sense. Nor does it make sense that Microsoft would take over a deal which does not make economic sense.

Douglas A. McIntyre