Google Distribution Deal Good News for News Corp

Google scored another distribution deal yesterday. This time it was with British Sky Broadcasting [BSkyB] (BSY). Before that, we saw AOL , Intuit (INTU), eBay (EBAY) [non-US], Vodafone UK and another Sky-sister Fox Interactive Media [including MySpace].

The deal includes search and sponsored search, video technology [for a UGC portal] and communications [a customized Gmail version, supplying @sky.com addresses]. These services are available to Sky broadband subs.

My take on this:

First, apparently there are warm relations between Google and News Corp (NWS), opening the door to further expansion.

* Google could be the preferred partner for similar deals at DirecTV, Sky Italia and others, once they start offering broadband.
* More News Corp properties could be included going forward, most notably offline properties. As Google is already testing ad serving to magazines and newspapers, the News Corp print subsidiaries could come aboard.
* Interactive TV could also be included.
* The press release even mentions mobile advertising as a possibility. Will Sky copy what NTL (NTL) did, acquiring Virgin UK, or what Comcast (CMCSA) did, partnering with Sprint (S)? Sky recently successfully ended a mobile TV trial with Qualcomm (QCOM) [MediaFLO], so there is another option for a deal. Currently, Sky already supplies content [including Premier League] to Vodafone UK.
* Also, Sky is looking into broadband expansion into Ireland.

Second, it reminds me of Yahoo!'s (YHOO) access deals with Verizon (VZ), AT&T (T), Rogers (ROG) and BT (BT) [except of course, Yahoo! aggregates a whole lot of content with it]. Google and Yahoo! are clearly fighting to win partners. Of interest is that Vodafone UK works with both Google [sponsored search] and Yahoo! [display ads], as does eBay [Yahoo! in the US, Google elsewhere]. It comes as somewhat of a surprise to me that News Corp doesn't join this divide and conquer strategy.

Disclosure: Author has no position in above-mentioned stocks.