Microsoft expands Facebook deal

Microsoft has expanded its search and online advertising deal with Facebook, the social networking site it bought a 1.6% stake in last October. It is a similar to MySpace’s deal with Google and Bebo’s with Yahoo!.

The partnership was announced yesterday (July 24) at Microsoft’s annual investor meeting in Washington, where chief executive Steve Ballmer revealed details about the company’s online strategy following its failed bid to buy rival Yahoo!.

He says that Microsoft will continue to invest heavily in search and bolster its 3.5% share of the global search market and it is thought to be looking at a number of deals with other sites to achieve that.

Ballmer adds: “Search is one of the starting points on the internet. It’s the best place to distribute new internet services to the consumer.”

It also follows news that Kevin Johnson, the executive who led Microsoft’s $47.5bn (£95bn) failed bid to buy rival Yahoo!, was leaving the company.

Microsoft already has an exclusive agreement to deliver banner ads on Facebook pages, but the expanded deal will give Facebook better search capabilities. Facebook founder Mark Zuckerberg says: “Search in Facebook definitely needs to get better.”

Facebook currently uses a homegrown search engine for its social network, and it does not include results from the Web. The deal with Microsoft will be exclusive for the US only.

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