This just in - MySpace to get pwn3d by Google

A couple of days ago, I made some Fearless Predictions about the future of social networking, including the observation that MySpace was becoming the new AltaVista… and today, we have news that MySpace and Google are negotiating a new deal for how MySpace will display Google advertising.  A few years ago, when MySpace was hot-as-the-sun, Google ended up paying $900m, or about $300m/year.  These days, MySpace is losing users and traffic, at a clip of about 20% per year, and now MySpace needs Google much more than Google needs MySpace…

Sources say that while Google has gotten plenty of advertising impressions (MySpace uses any excuse to put Google search results and Google ads in front of users), those ads don’t convert well. Add to that the dramatic shrinking of MySpace page views and the predictive modeling gets ugly.

Google knows MySpace is shrinking by about 20% a year. And unlike the last time they negotiated with News Corp., they now have nearly three years of actual operating history with the company. They’ve got real data to value the deal.

Unless Microsoft or perhaps Yahoo comes in and bids very aggressively, MySpace is going to get slaughtered in the negotiations.

Like I said, MySpace = AltaVista…  doomed.