Will MySpace become another battleground for Microsoft and Google in their search wars? Since News Corporation snapped up the social networking site last July, monthly unique visitors have more than doubled to 48m – making it among the most visited sites in the US. The challenge now is to make meaningful revenues. It is on the right track. Pali Research estimates MySpace was generating about $2.5m a month when News Corp agreed to buy it and that revenue should hit $15m-$16m this month. MySpace has shown some positive signs with advertising – while trying to avoid being too aggressive and turning off its user community. Companies, such as movie studios, are also experimenting with the creation of their own MySpace pages. And MySpace is planning to offer some paid downloads.

But another big opportunity is paid search. For example, users leaving MySpace have become a significant source of traffic for Google. If MySpace can be smarter at getting those users to remain on its own site when searching the web – there is already a search bar on the home page powered by Yahoo – the opportunity could be significant.