News Corp targets online ad technology

In an effort to increase its ability to sell advertising against the growing audience of MySpace.com and other internet properties, News Corp is considering acquiring companies with technology that could help place ads online.

Peter Chernin, president and chief operating officer of News Corp, said at a conference that the company was focused on various ad-serving technologies because it needs to find a way to monetise its traffic.

Following News Corp’s acquisition of MySpace last year for $580m, the social networking site’s audience has grown sharply, and it is now the second most popular internet site in terms of page views after Yahoo.

Display advertising, which is only a small part of the rapidly growing internet advertising business, could grow to be worth $600m to $800m within a few years, Mr Chernin said.

The vast majority of online advertising budgets is spent on search advertising, dominated by Google.

Mr Chernin said there were a number of steps News Corp planned to take to gain a share of the money spent on search advertising. As well as highlighting search links on MySpace and other internet pages, Mr Chernin said a search contract might be auctioned off to one of the big three players: Google, Yahoo and Microsoft’s MSN.

The Financial Times recently reported that discussions had taken place about a search deal with MySpace and the three biggest search engines.

However, people familiar with the talks said that the most interest was from Google and MSN.

MySpace is one of the few big sites with a significant internet audience that is not yet aligned with one or other of the search groups.

Last year, AOL extended a deal with Google, with MSN losing its effort to gain AOL as a search partner.