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October 16, 2006

News Corp. beefs up MySpace video

Steve Rosenbush

News Corp. made improvements to MySpace Video over the weekend. The changes came just after News Corp. CEO Rupert Murdoch met with Google CEO Eric Schmidt to address conflicts created by Google's $1.65 billion acquisition of YouTube. link. The changes were first reported by TechCrunch. MySpace now features videos on its homepage. User profile pages now include a section called Video Space, which displays videos. These videos appear on profile pages automatically after they are uploaded. That eliminates the need to paste code into a profile. YouTube still requires users to take an extra step by cutting and pasting code onto a Web page before they display a video.

There's no question that News Corp. has decided to focus more on video as a response to the Google-YouTube acquisition. Many YouTube videos wind up on MySpace pages. As Google starts integrating ads into some or all of those videos, News Corp. wants to make sure that it gets a cut of the revenue.

If News Corp. can't come to terms with Google, the conflict could turn nasty. News Corp. could block YouTube from its site and force its users to use MySpace Video. That would run the risk of alienating MySpace users. But MySpace already is the number-two video site, even though it hasn't placed much of a priority on developing video until now. That suggests that News Corp. might have a chance of winning a fight with Google. Neither Google nor YouTube have had much luck in the social networking arena where MySpace leads by a huge margin.

Google has plenty of leverage, though. For one thing, it's Google. The Internet powerhouse signed a $900 million agreement with MySpace this year. News Corp. wants to expand that agreement, which is currently focused on search ads, to include other realms such as display ads and video.

It's tough to imagine that either side is willing to let this conflict spin out of control. "I think a lot of what's happening right now is posturing. Each company wants to protect their property, but they also recognize that they can't go it alone. Everybody needs somebody. They just want that somebody to need them more," says Jeff Lanctot, vice president of digital agency Avenue A/Razorfish.

02:43 PM

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