The internet search group will also provide text-based advertising for MySpace pages, using its search technology to post appropriate advertisements for each page.

The deal extends to other websites in News Corp’s Fox Interactive Media portfolio. However, it excludes Fox Sports, which has a separate agreement with Microsoft’s MSN.

The Google deal is a huge loss for Yahoo!, one of its biggest rivals, which has until now supplied the search engine facility on MySpace.com, News Corp’s most popular website.

As part of the deal, Google will also have a right of first refusal on display advertising sold through third parties on Fox Interactive Media’s network.

Under the terms of the agreement, Google will pay a minimum of $900 million to Fox Interactive, depending on the volume of traffic on the sites.

The guaranteed minimum revenue share payments are expected to be made from the first quarter of 2007 until the second quarter of 2010.

News Corp bought MySpace in July last year in a $580 million deal that also gave it control of grab.com, a gaming site.

Peter Chernin, News Corp’s chief operating officer, said: “This is just the first of many steps we plan to take with Google. We look forward to expanding our relationship into many new areas over years to come.” The companies are also expected to look at video advertising.

Eric Schmidt, Google’s chief executive, said the deal furthered the company’s “mission of making the world’s information universally accessible and useful”.

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