Antitrust Beef Against Google & IAC/InterActive

SAN FRANCISCO (CN) - The former CEO of Intermix Media, which formerly owned MySpace, claims in an antitrust class action that Google and Ask.com set up a complex scheme to benefit themselves, while allowing News Corp to purchase MySpace on the cheap in 2005.

Plaintiff Brad Greenspan claims that a bid-rigging scheme between Google and Ask.com caused MySpace to be worth $580 million, when the social networking site could have been worth about $132 billion.

Greenspan sued IAC/InterActiveCorp., which now owns Ask.com; News Corp.; and two former MySpace board members, Geoff Yang and David Carlick.

The lawsuit revolves around a search engine contract for Myspace.

In 2005, Yahoo! ended its contract with the social networking site and MySpace wanted a new search engine partner. Search engine contracts are valuable because they help drive Internet traffic to search engine sites such as Ask.com and Google.

Ask.com, MySpace and Google entered a complicated set of secret agreements ensuring that Google would not bid on MySpace's search engine contract until the company was acquired by News Corp., according to the complaint.

If Google had won the contract before the acquisition, MySpace would have sold for far more than the $580 million for which News Corp. bought it for, Greenspan claims.

Ask.com also benefitted from the deal because it was performing the search engine services for MySpace at the time, inflating its value, the complaints states. Ask.com was acquired by IAC for nearly $2 billion.

Greenspan says he owned 10 percent of stock in the company that formerly owned MySpace, and lost millions of dollars during the sale to News Corp.

He is represented by Tyler Belong, with Hogue & Belong, of San Diego.

He seeks damages for antitrust violations and unfair competition, and restitution of money to stockholders.

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