Facebook Abandons Ad Partnership With Microsoft

Facebook and Microsoft have terminated their exclusive advertising agreement, which was originally meant to run till next year, as the social networking giant is now dumping Microsoft for serving banner adverts on its platform and taking up the onus at its own.

This doesn’t mean that the relationship between the two giants has become sour, it’s just that Facebook is now looking ahead to leveraging its large social networking platform to reap the benefits of soaring business of social ads.

Microsoft is apparently downplaying the loss of the deal by touting a new search agreement between the two companies that will include use of Bing search technologies across the networks of Facebook.

Nevertheless, in spite of terminating the agreement, Microsoft still holds the exclusive rights to post text adverts on the social networking website beyond 2011. The two companies penned an exclusive advertising deal in 2006, which allowed Microsoft to design and dish up graphical ads on Facebook.

A Facebook spokesperson asserted that social ads are more lucrative in modern scenario, simply because they are served to the users on the basis of the information they provide.

“This combination of targeting and social relevance is the primary driver behind the shift in strategy. Microsoft has been a great partner and we continue to work with them in other areas, including search”, the spokesperson said.

Our Comments

Someone mentioned a few days ago that Facebook could potentially become a gated community that would eventually attract a significant premium and pose a massive threat to the hegemony of Google. This is yet another step towards this goal which would make of Facebook, a 21st century AOL, only 10 times bigger.

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