The Cost of Falling MySpace Traffic: More Than $100 Million

MySpace is shedding traffic fast, and that is already costing more than $100 million, according to estimates offered by parent News Corp.

The $100 million is being reduced from a broader, $900 million advertising deal with Google, one whose valuations are tied to specific traffic minimums.

The Google deal alone covered the $580 million buyout of MySpace by News Corp., though that dash of brilliance is getting overshadowed by current issues.  During the past year, MySpace has ceded more than 50 percent of its share of social networking traffic, according to a recent estimate by Hitwise.

Of course, Facebook and Twitter loom large in this story, though the analysis on MySpace Music is a bit tricky.  Instead of a direct face-off, MySpace is dialing more heavily into content, and MySpace Music remains a massively important place for bands, fans, and on-demand music sampling.  That, coupled with the acquisition of the Facebook-nestled iLike and an expected Facebook Connect tie-ins, makes the relationship between these titans more nuanced and complicated.  Oh, and so is the relationship with Google, as evidenced by the recent music-related tie-up.