• by Wendy Davis , Staff Writer @wendyndavis, March 6, 2007

Look for MySpace to soon play a much bigger role in helping News Corp monetize its Web properties. That's according to a particularly bullish report issued this morning by brokerage house Merrill Lynch.

"MySpace is already one of the most widely used sites for video downloads on the Internet. With online video CPM s often running $40-$60, this could be a meaningful driver in the coming years," states research analyst Jessica Reif Cohen in the report, "Internet assets to drive improved valuation."

In addition to selling online video ads, MySpace can significantly increase its revenue simply by selling more inventory itself. Last year, the company only sold about 10% of its inventory directly, through its own ad sales force. About 40% of the site's inventory was sold as remnant, while around 50% went unsold.

But Merrill Lynch predicts that the company has "made significant progress" in beefing up its direct sales efforts and that the proportion of inventory sold directly should increase to 40% by 2009.

Separately, Business Week just reported that News Corp. is gearing up to allow MySpace members to embed TV shows and other video from Fox on their pages. Business Week enthuses that such a move "would instantly create a huge new source of online video advertising inventory."

Maybe. The decision to turn fans into distributors probably can't hurt the company, but it's not at all certain that people want to watch "Simpsons" clips while visiting their friends' MySpace pages.