Google's YouTube acquisition no threat: News Corp.

News Corp's video service 'second only to YouTube'

Google's recent acquisition of YouTube is not a threat to News Corp.'s own efforts to offer user-generated video on the popular MySpace Portal, a top News Corp. executive said Thursday.

"I don't think that has any impact on our relationship with Google," said Peter Chernin, the president and chief executive officer of News Corp., speaking during a conference call with reporters and analysts.

News Corp. views user-generated video, a term for video that users post online for others to watch, as a way to bring more visitors to MySpace, Chernin said. "We are the No. 2 user-generated video site on the web, second only to YouTube," he said.

News Corp. is counting on a boost in revenue from advertisements created by the influx of visitors and additional page views that video brings to MySpace. While that means competition with YouTube, Chernin sees no threat to the advertising and search partnership that now exists between Google and News Corp.

"We continue to have a very good relationship," he said.

In August, Google won a deal to become the exclusive provider of search capabilities and search-related advertising to MySpace. Under the terms of that deal, Google must pay at least US$900 million to Fox Interactive Media -- the News Corp. subsidiary that operates MySpace -- between the beginning of 2007 and the middle of 2010.

As part of that agreement, MySpace this week began offering search capabilities based on Google's advertising, Chernin said.

While News Corp. and Google will compete in user-generated content, YouTube is a potential distribution platform for News Corp.'s own video content, such as television shows and sports coverage, Chernin said. "It will represent a very large distribution platform, which should provide good opportunities for us to monetize our copyright content," he said.

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Sumner Lemon

IDG News Service
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