News Corp puts new generation advertising to work on MySpace

On Thursday, Fox Interactive Media (a segment of News Corporation (NYSE:NWS)) announced its purchase of Strategic Data Corporation (SDC). SDC offers services to help companies optimize their ad delivery. According to numerous news reports, the purchase was made to improve the manner in which MySpace matches ads to users who are most likely to click them and, in turn, help News Corp. increase revenues it receives from MySpace.

It should be noted that although media reports are focusing on the role SDC will play in MySpace going foward (because MySpace, owned by Fox Interactive, is one of the most widely-visited sites on the Web), Fox Interactive Media owns many other popular web properties such as AskMen and AmericanIdol.com

This acquisition makes tremendous sense for Fox Interactive because social networking sites are capable of producing extraordinary revenues per user. However, this is only realized when ads are delivered properly and efficiently. Considering the nature of social networking sites, especially MySpace, in which users list their interests, hobbies, and so on, properly placing and matching ads throughout the site should not be difficult if the technology is capable and, judging from news reports, SDC seems to be a very legitimate advertising-technology company.

It will be interesting to see how Fox Interactive uses SDC's technology throughout its network of popular web properties. I expect the entire network's revenues per user to increase as ads are matched more effectively.