Fox Interactive Media, the online services arm of News Corp. that includes MySpace, actually saw its revenue decrease from the previous quarter, falling from $230 million to $210 million. That's real bad when consider that MySpace and other FIM sites are growing, but revenue is decreasing. Also bear in mind that Google's search deal with MySpace generates about a third of that revenue. Indeed, during the earnings call with analysts and reporters, COO Peter Chernin and Chairman Rupert Murdoch conceded that selling ads on social networks is actually very difficult. For one thing, there's too much inventory and not …

Google may soon place display ads alongside search results, according to Bloomberg News. Google VP Marissa Mayer told Bloomberg Radio that matching graphical display ads with image searches, for example, "represents a large opportunity" with "a lot of potential for advertising revenue." However, she said the company had to be careful not to drive users away with such ads. Google wouldn't place display ads next to text search results, for example. The search giant is clearly after new sources of revenue now that sales of its four-line text ads, which generate almost all of the company's earnings, are slowing. …

During the company's annual shareholder meeting, Google CEO Eric Schmidt revealed that new YouTube advertising products would be released in the coming months, reiterating that the company's main goal for the year is to start making serious money from the online video sharing service, which enjoys tremendous usage but delivers puny ad revenues. "We have new ad products that are not pre-roll and post-roll," he said, though he would not discuss specifics. "We have new approaches. Think of them as ads that are in the context of YouTube. They use the page around YouTube in interesting ways." Co-founder Sergey …

Microsoft on Thursday released those who agreed to serve as board members in the event of a hostile bid for Yahoo, The Wall Street Journal reported, indicating that the software giant will not be reversing its decision to walk away from the $47 billion deal. The decision comes amid talk that the parties will reopen negotiations after several large Yahoo shareholders have vented their frustration that a deal wasn't reached. Meanwhile, sources told the Journal that Yahoo shareholders, who are weighing whether to launch their own proxy fight, have now approached members of the Microsoft proxy board. The deadline …

Google believes it could arrange a search partnership with Yahoo that would pass regulatory scrutiny, co-founder Sergey Brin said at the company's annual shareholder meeting at its Mountain View, Calif headquarters. Last month, the companies ran a two-week test in which Google placed ads on Yahoo's search engine. Google CEO Eric Schmidt said the test went favorably and that the companies-one-time enemies-were now "very friendly." Meanwhile, the U.S. Justice Department is reviewing that test, and the Senate Judiciary Committee would review any formal partnership between Google and Yahoo, said Chairman Herb Kohl, a Wisconsin Democrat. In his now-famous letter to …

There's a lot happening behind the scenes post-Microhoo. The Wall Street Journal is reporting that Microsoft informally approached Facebook about a possible sale, and that informal talks with News Corp. over a possible MySpace spin-off are ongoing. Sources claim that Google, meanwhile, is getting cold feet about providing search ads for Yahoo, indicating perhaps that the search giant was only ever interested in blocking a Microsoft-Yahoo union. After all, Yahoo needs Google here more than Google needs Yahoo. The Sunnyvale, Calif. Web giant is also said to be in talks with Time Warner over trading AOL for an equity stake …