News Corp. said on Tuesday that its MySpace.com Web site plans to tap one of the three leading Internet companies to provide its popular youth-oriented network with search-based advertising. The global media conglomerate run by Rupert Murdoch plans to solicit bids from Microsoft, Google and Yahoo, News Corp. Chief Operating Officer Peter Chernin said at a Deutsche Bank Media & Telecom conference broadcast over the Web.
"We will auction off our search business to Google, Yahoo, or MSN," Chernin said, confirming market speculation.
Murdoch has previously said that News Corp. was seeking an investment in the search business. On Tuesday, Chernin said, "Our instincts are we can't get into the search business in the same way."
News Corp. purchased MySpace, one of the Internet's biggest online hangouts for teens and young adults, last year for about $580 million.
But despite owning one of the largest customer bases on the Internet, with about 85 million members, it has not fully exploited advertising sales opportunities at the unit, Chernin said. "We've just scratched the surface of how to monetize it."
MySpace has become a focus of investor attention for News Corp.'s media empire, which spans the Fox television and cable news networks as well as the New York Post newspaper, even though it remains a tiny part of the company's operations.
The division is being viewed as a testing ground for new media opportunities, particularly efforts to reap advertising dollars from social networking, one of the hottest areas of audience growth online.
Although MySpace has transformed into the second-most-popular site on the Internet by page views as of May, according to comScore Networks, it continues to trail competitors in ad sales due to the types of ads it currently sells.
About 80 percent of its sales come from so-called remnant sales, or bulk sales of unused advertising space. About 20 percent comes from display ads, which cost about seven to eight times more, Chernin said.
Chernin said he expects MySpace to flip the ratio over time.
For its well-established Fox television network, Chernin said, the network has completed 70 percent of its advance "upfront" sales to advertisers for the upcoming fall programming season, when its rates are expected to rise about 2 percent to 3 percent.
News Corp. on Tuesday shares closed down 46 cents, or 2.3 percent, at $19.26 on the New York Stock Exchange.
