News Corp. And Viacom Have Very Different Strategies To Deal With Google.

Implications: 1. MySpace may be closing the gap (in some respects) with Google/YouTube     2. News Corp. understands that advertisers are looking for more than just web traffic.

Analysis:  

MySpace is closing the gap on YouTube in at least one respect: In April, the site's video views were at 50 million, only slightly behind YouTube's 58 million. The number of MySpace video users rose by 50% since February. MySpace is taking a serious shot at Google-YouTube by launching MySpace TV. MySpace TV is a video site that plans to lure not just amateur videos but content from the networks and studios.

Advertisers want to see traffic. The quick way to build traffic is to offer polished user-generated tools. However the big advertising dollars are attached to professional content. Professional content is not easy to land. The biggest MySpace TV deals are for professional content are from smaller players like National Geographic, webisode versions of library shows like "Diff'rent Strokes," plus some web-originals, such as the Michael Eisner’s "Prom Queen." MySpace is saying it is only a matter of weeks before other networks and studio deals are announced.

MySpace TV will become a separate branded site and URL which may attract non-MySpace users and tap traffic from YouTube. At the same time, MySpace TV will more fully integrate video into the main site, MySpace, looking to strengthen the site's hold on the young demo that uses the site for personal pages …the business that has been increasingly siphoned off by Facebook recently.

With the move, News Corp. is forming a very different strategy than another leading Google competitor, Viacom. Viacom is building its own online domain with the acquisitions of Atomfilm and Xfire. However, Viacom has refrained from undertaking major online video initiatives. The billion-dollar Viacom lawsuit against YouTube, could end with a licensing deal between the companies.

On the other hand, News Corp. is building its own network that can distribute News Corp. content and the content of others, thus rendering outside partners unnecessary.