Thursday, February 22, 2007

MySpace's Relationship with Google--is it Constraining Other Options?

Here is an interesting blog that deals with the challenges of navigating multiple relationships that may be necessary to develop robust business models in the network era.

MySpace and Google entered into a relationship in 2006 when Google became the exclusive provider of text ads on MySpace (although the deal apparently has not been finalized yet). It appears that Google is protesting moves by MySpace to pursue other relationships that may be seen as weakening Google's position relative to MySpace.

The blog makes important points as below. The issues each company faces:

1. MySpace wants to empower their user base and become more of a centralized hub, by allowing "peer commerce" with eBay's PayPal mechanisms.
2. eBay is facing negative backlash from investors, who are looking not only for growth, but to stay ahead of competition from Google's new payment system Checkout.
3. Google has a hard time sharing ad space. They certainly don't want to share MySpace with eBay, when they're trying to steal market share with Google Checkout.


What options (including alliances) should MySpace pursue to develop a robust winning business model?

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