• TechCrunch, Friday, May 22, 2009 12 PM

Google is negotiating a new guaranteed search deal with MySpace, TechCrunch reports, but sources claim the search giant thinks the deal is only worth $50-$75 million, which is significantly less than the $300 million per year Google pays now. We've all heard that the Google ads don't convert well. "Add to that the dramatic shrinking of MySpace page views and the predictive modeling gets ugly," says Michael Arrington.

With three years of operating history with the company, Arrington says that Google should know how to value such a deal. And unless Microsoft or Yahoo comes in and bids aggressively, "MySpace is going to get slaughtered in the negotiations."

News Corp. has its top negotiator on the case, but Arrington thinks it will take a miracle for MySpace to come out on top with this deal. Google revenue constitutes a third of MySpace's bottom line, and unless a deal is agreed on similar terms, sources claim that, "MySpace is facing massive layoffs and a general downsizing of its business."

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