'YaSpace' would shake up the Net

Discussed Yahoo-MySpace deal would create new No. 1 portal

The rumored Yahoo-MySpace marriage would vault the combined portal into the top spot as far as unique visitors per month, according to calculations based on Nielsen// NetRatings data, but Google Inc. would still maintain its dominance in other areas.

Published reports last week in the wake of Yahoo co-founder Jerry Yang replacing Terry Semel as CEO suggested that News Corp. was looking into swapping its MySpace property for a 25% stake in Yahoo. Neither company has commented on the speculation.

According to NetRatings, News Corp.'s MySpace continues to be the top social networking site, receiving 56.6 million unique visitors in May. Its closest competitor among pure-play social networking sites remains Facebook, which had more than 42 million fewer visitors last month.

MySpace's numbers, together with Yahoo's May traffic of 108 million visitors, would make Yahoo the most-trafficked parent company on the Internet.

If the numbers hold, it easily would surpass Google and Microsoft Corp.'s numbers, which in May had 116 million and 118 million visitors, respectively, according NetRatings.

But if Yahoo-MySpace were to take off, Google could be one of the biggest beneficiaries. The company provides search for the social networking giant in an agreement that runs until 2010. So if the Yahoo partnership brings MySpace more visitors, more users would then be using Google's technology.

The partnership also would not address the fact that Google remains far ahead of Yahoo in share of Internet searches. For May, Yahoo had 21.5% of the share vs. Google's 56.3%, a disparity that has grown in the past two months, according to NetRatings.

The real winner in the deal, though, would be News Corp. Rupert Murdoch's conglomerate bought MySpace nearly two years ago for $580 million, and if it were to turn that into a 25% stake in Yahoo, as reports suggest, the company would stand to gain as much as $10 billion, "making it the mother of all Internet deals," according to Jeffries & Co. analyst Youssef Squali.

Nielsen//NetRatings is owned by the Nielsen Co., parent company of The Hollywood Reporter.
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