Microsoft Teams With Facebook
By Anna Johnson on July 26th, 2008Microsoft wants a share of that Facebook growth.
Last October it spent $240 million on a 5 percent equity stake in the social network, and the year before it agreed to sell and manage display advertisements on Facebook. Now the two companies have agreed to a deal under which Microsoft will provide web search services and associated ads on Facebook pages by the end of this year.
Microsoft, which lags far behind Google and Yahoo in search, presumably views Facebook as a relatively fast way to expand the audience for its search engine. Under the deal, the over 29 million people who actively use Facebook in the U.S. and the 90 million who use Facebook worldwide will see Microsoft’s Live search box on their own and their friends’ Facebook pages.
Not everyone sees the deal as yielding significant benefits for Microsoft. Silicon Alley Insider’s Peter Kafka says that while Microsoft will benefit from further distributing its search platform, the deal probably didn’t come cheap and, at best, may increase Microsoft’s share of search by only a few points.
Oh well, it’s back to trying to develop a better search engine…
Source: Brad Stone, “Microsoft Seeks an Ad Friend in Facebook”, The New York Times, July 25, 2008, Peter Kafka, “Microsoft’s Facebook Deal Really A “Threat” To Google? Nope”, Silicon Alley Insider, July 24, 2008
