• The Wall Street Journal, Thursday, February 8, 2007 12 PM

Google's search deal with News Corp.'s MySpace hangs in the balance as the social-networking giant negotiates with competitor eBay over "peer commerce." Apparently, the landmark search deal struck between Google and MySpace six months ago was never finalized. MySpace is carrying Google ads in return for a minimum $900 million in shared revenue over the next three years--the biggest deal struck between an ad network and a social network. MySpace wants to ensure that by signing a clause that could extend the contract, the Web giant wouldn't be prohibited from making deals with other third parties.

"Peer Commerce" is a new idea that would let MySpace users buy and sell items from each other using eBay's automated e-commerce technology and its PayPal payment system. Sellers would post items for sale on their profiles, and eBay auctions would then be updated in real-time in a section devoted to sales.

Google obviously won't take kindly to any e-commerce arrangements that undercut its new service, Google Checkout, which the online giant hopes will become a significant revenue source. The tension this creates underscores the mounting rivalry between Google and eBay, which in a way are partners, as eBay is one of the largest buyers of Google AdWords.

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