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Microsoft has secured a $240m piece of Facebook, in an advertising deal that values the social networking site at $15billon (£7.3bn). Under the partnership, Microsoft will be the exclusive third-party advertising partner for Facebook, and will begin to sell software and services ads in the US and worldwide. Terms also dictate Microsoft will have control over the placement of banner ads on Facebook outside the U.S., where about 60% of Facebook's active users reside. With an average of 200,000 new users registering each day, Facebook continues to be one of the most-trafficked internet sites, giving Redmond a significant ad advantage in its battle against Google. “Making this investment and expanding this partnership will position Microsoft and Facebook to better take advantage of advertising opportunities around the world,” said Kevin Johnson, president of the Platforms & Services Division at Microsoft. “We have partnered well over the past year and look forward to doing some exciting things together in the future. The opportunity to further collaborate as advertising partners is a big reason we have decided to take an equity stake, and is a strong statement of our confidence in the long-term economics of this partnership.” Owen Van Natta, chief revenue officer at Facebook said: “We are pleased to take our Microsoft partnership to the next level. We think this expanded relationship will allow Facebook to continue to innovate and grow as a technology leader and major player in social computing, as well as bring relevant advertising to nearly 50 million active users of Facebook.” The deal comes after Microsoft CEO Steve Ballmer’s reportedly promised to buy 50 companies in the advertising and Web 2.0 spaces over the next 12 months. Writing on his blog, Microsoft blogger Robert Scoble added; “If this rumor is true [MS buying a chunk of Facebook], it means big revenues for Facebook. “Microsoft has a world-class advertising sales team. I bet they could promise more revenues than Google could, particularly because Microsoft’s sales team is much more focused on banner advertising than Google’s team is.” And disclosures obtained by Business Week reveal the competition between the two giants is fierce. Pointing to their own social network Orkut, which was developed by a Google employee, Sergey Brin, the company’s co-founder, seemed to pre-empt Microsoft’s deal last week, saying: “We don’t feel that we need to own everything that is successful on the internet.” Oct 25, 2007 Email this article Printer friendly page Previous Page
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