In fact, Anmuth says that Google is now so dominant in search, that there's little incentive for the company to pay for any more distribution deals. Meanwhile, Microsoft "seems determined to buy share at any cost," having recently scooped up significant deals with Dell and Verizon. Therefore, says Blodget, if Google dumps MySpace, Microsoft should be happy to step in and overpay for the opportunity to be a substitute.
Says Anmuth: "In our opinion, Google no longer sees the need to win distribution at any cost, and we also think it is internally re-evaluating its relationship with MySpace which includes ~$900 million in payments in the 3.5 year term leading up to mid-2010. Importantly we do not believe Google would lose share as a result of this shift."