To Rupert Murdoch: Is MySpace acquisition really 'paid for'?

Upon the conclusion of yesterday's Google Q3 earnings conference call, I put forth: Google, MySpace $900 million dollar NOT done deal?:Contrary to popular belief, the Google–MySpace “partnership” is not a $900 million dollar “done deal.

Upon the conclusion of yesterday's Google Q3 earnings conference call, I put forth: Google, MySpace $900 million dollar NOT done deal?:

Contrary to popular belief, the Google–MySpace “partnership” is not a $900 million dollar “done deal.”...Today’s Google Q3 earnings conference call revealed that the entire Google-MySpace agreement is contingent; A definitive contract has not been executed by the parties.

Google CEO Eric Schmidt said during the conference call:

With respect to your question on MySpace, we signed a binding letter of agreement which we are operating under. We will come to final contract terms, I think, very quickly on that.

What is the status of the "multi-year search technology and services agreement” announced jointly by Google and News Corporation August 7, 2006?

According to the official announcement press release last August:

Google will be the exclusive search and keyword targeted advertising sales provider for Fox Interactive Media's growing network of web properties including MySpace.com. The agreement calls for Google to power web, vertical and site specific search for MySpace.com and the majority of Fox Interactive Media properties…

The integration of Google's services including consistent search navigation across Fox Interactive Media's network of properties is slated to begin in the fourth quarter 2006 and will provide users with access to Google's industry leading search capabilities as well as text and display advertising from its global advertiser base.

Under the terms of the agreement, Google will be obligated to make guaranteed minimum revenue share payments to Fox Interactive Media of $900 million based on Fox achieving certain traffic and other commitments. These guaranteed minimum revenue share payments are expected to be made over the period beginning in the first quarter of 2007 and ending in the second quarter of 2010.

The publicly announced terms indicate that $900 million in revenue share from Google to Fox Interactive Media is a contingent guarantee, not an irrevocable one.

Google conveyed yesterday in its Q3 conference call that the entire agreement is contingent upon definitive contract execution.

Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation, however, definitively put forth in his company's 2006 Annual Report:

Earlier this summer, after the fiscal year-end, we announced a landmark deal with Google to provide search functionality to most of our Internet sites--most importantly MySpace...With at least $900 million committed to us over four years, this agreement more than pays for the MySpace acquisition.

Given the contingent nature of the terms of the "landmark deal" and the lack of a definitive contract execution between the parties, can Rupert Murdoch accurately claim that "the agreement more than pays for the MySpace acquisition"?

Have News Corporation shareholders been mislead?

I have asked Fox Interactive Media to clarify the status of the "landmark deal" with Google; the company is "not commenting."

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