Google signs $900m deal with MySpace

Google has beaten Microsoft and Yahoo! to the contract to supply search services for the News Corporation-owned social networking site MySpace, in a deal worth at least $900 million.

Google will now be the exclusive provider of search and keyword advertising across the Fox Interactive Media network through its AdSense program. It will also have a right of first refusal on display advertising sold through third parties on the sites.The search giant will pay Fox a share of the revenue it earns from selling ads on to the sites over the period from 2007 to 2010.

Peter Chernin, the president and chief operating officer at News Corp, hinted at further deals between the two companies. He said: "This is the first of many steps we plan to take with Google."

Separately, Google also signed a deal this week with MTV Networks, a division of Viacom, to trial the distribution of its TV content over the internet. Google will now supply ad-supported clips of shows such as SpongeBob SquarePants and the MTV Video Music Awards via its AdSense network.

Tom Freston, the president and chief executive of Viacom, said: "Collaborating with Google gives us an opportunity to take our content and distribute it even more widely on the web."

Analysts upgraded Google stock from "hold" to "buy" on news of the deal.