Microsoft signs ad deal with Facebook

Microsoft will supply banner and text ads for Facebook, a social networking site.

Microsoft will supply banner and text ads for Facebook, a social networking Web site, under a deal signed after the two companies only opened discussions last week, they said.

Under the exclusive deal, Microsoft will use its adCenter platform, which lets advertisers decide how much they will pay when an ad is clicked. Other Microsoft technologies that will be used include automated text-based ads relevant to the content of a particular Web site.

Facebook and Microsoft did not disclose the financial terms of the deal. Facebook, started in 2004, says it has 9 million users.

The quick pace of the Facebook deal represents Microsoft's urgency in securing online advertising revenue, an area where it faces a well-equipped challenger, Google. The company's AdSense program also allows buyers to purchase ads that will appear on Web sites with related content.

Earlier this month, Google snared a potentially lucrative deal to provide search and advertising services to MySpace.com, one of the most popular social networking sites, and to other News Corp. Web sites. MySpace is estimated to have at least 70 million users, but so far News Corp. hasn't tapped its full advertising potential.

Google will pay Fox Interactive Media, News Corp.'s online division, at least US$900 million before the end of 2010's second quarter. In exchange, Fox must hit certain Web traffic goals.

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Jeremy Kirk

IDG News Service
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