Commentary

MySpace: Google's Frienemy?

Google has been called the agency "Frienemy," and we have talked about the many reasons why the title fits. But while Google may not be considering the agency neither friend nor enemy as it continues its mission to organize the world's content, who does keep Google up at night? My guess is that if you had to ask Eric that question, somewhere near the top of the list (distantly behind Bill G.) would have to be MySpace. I know what you're saying: "Google and MySpace just signed a huge deal to work together." But think about it.

First and foremost, MySpace is quickly climbing the ranks as one of the top origins of searches online. As long as MySpace is where people spend their time online, that's where they will start their searches, especially if MySpace begins to emphasize the placement of the search bar. Sure, Google has gone into a variety of businesses since its early search days, but to this day a substantial majority of its revenue is still derived from search (both on Google.com and sites that syndicate Google's search technology). The recent deal between the two means that those searches originating at MySpace will be monetized by Google, but as more searches originate on MySpace rather than Google.com, Google will be forced to share increasing portions of revenue for those searches.

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If Google's revenue-sharing deal with MySpace is anywhere near as generous as its deal with AOL (which there is reason to believe it is), this will mean that for every search that once happened at Google.com, but now happens somewhere on MySpace, Google will lose about 90% of its revenue. And now, MySpace users get all the quality of Google without ever having to go to Google.com or having to download a Google toolbar.

Despite all of this, Google had no choice but to make the deal. After all, it was the AOL syndication arrangement that catapulted Google to the top, and it can't risk having Yahoo--or some upstart search engine developed by Ph.D. students not named Larry or Sergey--use MySpace's traffic volume to catapult its own search ambitions. Google is allowing MySpace users to receive an RSS feed on their personalized Google homepage to keep them updated on the status of their MySpace account, hoping to keep some of those searches at home.

Next, MySpace's content doesn't lend itself to Google's cold algorithmic mentality. There are pictures, music, and art. The text is scattered and not necessarily a great barometer by which to determine the content's purpose (if there even is a purpose to social content). If there is one type of search where an innovative start-up with a novel approach could catch Google, it's the realm of social search. As MySpace users continue to generate content at breakneck speeds, Google will be forced to rethink its approach to making this content searchable while competing with nimbler start-ups. 

In addition; Google has its own ambitions as a social network (see: Orkut). MySpace is going to be a player in the instant messaging space; will there be a deal with GoogleTalk or will MySpace continue to improve on its own? Will the lines blur between people's gmail and their myspace messaging account? And the list continues....

All this aside, MySpace's issues are Google's ticket to growth in so many ways. But will they be friends or enemies in the future? Where do you see the points of contention? Or do you see them living happily ever after? 

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