Author: Reuters

However, Microsoft – the exclusive provider of web search on Facebook – will
continue to sell text-based search ads on the website as the partners
extended the arrangement beyond 2011, when it had been due to expire. A
Facebook spokesman declined to say how long the deal has been extended.

Microsoft also said it will further integrate its Bing search engine into
Facebook while expanding its reach beyond the United States.

Facebook, which counts nearly 400 million users, said its own display ads
feature interactive aspects and can target viewers based on their personal
information, making them better suited to its social networking service than
Microsoft’s standard web banner ads.

“Ad formats that feature social actions perform better and provide a better
user experience since they are more consistent with the look and feel of
Facebook,” the company said in a statement. “This combination of targeting
and social relevance is the primary driver behind the shift in strategy.”

Facebook said it stopped displaying Microsoft banner ads in some international
markets recently, and following additional talks with Microsoft, has agreed
to stop running the banner ads across all of Facebook. The change will take
place over the next 30 days.

Facebook has long sold its own display ads on users’ profile pages and other
parts of the site, but the company allowed Microsoft to sell banner ads in
certain sections of its website in 2006. The deal, which was extended in
2007, was supposed to run until 2011.

A Facebook spokesperson would not provide details on whether the advertising
deal with Microsoft entailed any revenue sharing agreement, or whether
Facebook would pay Microsoft a fee for altering the deal early.

The news comes as Facebook has increased its focus on its financial
performance. In September, Facebook said it had become free cash flow
positive – meaning that the company makes enough money to cover the costs
associated with running the service – ahead of schedule.

Microsoft said on its corporate blog on Friday that Web searches within
Facebook will bring up information from Bing beyond just links to websites.
Microsoft’s search technology will be available on Facebook worldwide,
instead of just the United States, it added.

Facebook, which lets users connect and share information with friends online,
has emerged as one of the Internet’s most popular destinations and is
increasingly challenging the Web’s established powerhouses like Yahoo and
Google.

Microsoft invested $240 million (£154 million) in Facebook for a 1.6 per cent
stake in the company in October 2007.

On Thursday, Facebook said it expected to reach 400 million active users of
its site within the week, representing a gain of 50 million new users since
December. The company also announced a new design to its homepage.

Microsoft shares finished Friday’s regular trading session up 18 cents at
$28.02.

View full article here

Related posts:

1. Microsoft rush to amend Word following sales ban
2. More control for Facebook users over privacy
3. Microsoft says Google acts raise antitrust issues
4. Facebook enters partnership with free McAfee deal
5. Charles Arthur: ‘Microsoft thinks search engines are the key to internet use: it’s building Google-s