News Corp. in Japan website deal

Rupert Murdoch’s News Corp. will invest 590 million yen ($5 million) with Japanese billionaire Masayoshi Son’s Softbank Corp. in a Japanese version of the social networking website MySpace.

News Corp., which last year paid $580 million for MySpace, will put up the money in a 50-50 partnership with Tokyo-based Softbank, Japan’s largest provider of high-speed Internet access.

Softbank, which in April bought Japan’s third-largest wireless network, has said it will make online services such as stock trading and auctions available by mobile phone to help lure subscribers. MySpace, which lets users post photos, diaries and other items on the Web for free, may help Softbank add advertising revenue, said Kieran Calder, a senior analyst at CLSA Asia-Pacific markets.

“The only additional revenue gain may come from advertising,” Calder said. “Rather than building it from scratch, Son has decided to go with the established name.”

Ad spending on MySpace is expected to almost triple to $525 million in 2007, as payments from a $900-million, three-year agreement with Google Inc. start kicking in, according to a study by EMarketer Inc., a New York-based market researcher.

The website, which has 125 million registered users, is the world’s sixth-most popular, Internet traffic rankings company Alexa Internet said. The Japanese market for social networking has more than 10 million users, led by Mixi Inc., which had 5 million as of last July.

MySpace will probably win 60% of the $865 million that advertisers are forecast to spend next year on social networking sites in the U.S.