Just a few months ago, News Corp. (NWS) landed a crucial deal with Internet leader Google (GOOG). News Corp. designated Google as the search engine for MySpace, the social networking leader that News Corp. acquired last year for $580 million. The Google deal guaranteed $900 million in revenue for MySpace over a three-year period, more than
enough to recoup News Corp.’s cost of acquiring MySpace, plus a tidy profit.

Today, Youtube doesn’t compete directly with MySpace, where members keep home pages loaded with photos, videos, music and messages. But YouTube has a social networking component, because its users can share playlists and other information. That could be the foundation for more YouTube social networking features that would put it into more direct competition with MySpace.

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