• by March 12, 2007

MySpace representatives decline to comment, but blogs are abuzz with reports that the social networking giant is poised to throw its hat into the news business.

Terry Heaton's PoMo Blog reported last week that the Fox Interactive Media unit plans to launch a news service early in the second quarter.

The blog cites inside sources and the company's own sales collateral, including the following pieces of sales promotion: "MySpace News takes News to a whole new level by dynamically aggregating real-time news and blogs from top sites around the Web" and "Creates focused, topical news pages that users can interact and engage with throughout their day."

The PoMo blog cites sales collateral stating that MySpace News will invite users to rate and comment on news stories and to submit their own pieces.

The social network news blog Mashable reported that MySpace News will rely on both algorithms and user ratings. Fox Interactive Media likely will deploy NewRoo, a news aggregator it acquired a year ago, to run MySpace News.

In a related move, it looks like Fox Interactive Media wants to pull a YouTube. Peter Levinsohn, the unit's president, told investors at a Bear Stearns conference last week that the company is in talks to amass video clips for online distribution. The comments come on the heels of a BusinessWeek report that News Corp. was gearing up to allow MySpace members to embed video clips of Fox shows on their profiles.

Levinsohn said Fox Interactive Media was on track to generate $500 million for the fiscal year. In projecting a doubling of ad sales by 2009, Merrill Lynch cited an expansion of the unit's ad-sales staff and improved technology as reasons for increasing cost-per-thousands on MySpace.

It's not so surprising that MySpace wants to launch a news service. After all, the renegade company is part of the News Corp. empire, so offering news--everything from sports and celebrity gossip to politics--isn't much of a stretch. It's also a way for MySpace to use its vast audience to create and distribute more content.

The company also acquired Strategic Data Corp. with the stated intent of using its profiling capabilities to monetize MySpace pages.