Microsoft signs advertising deal with Facebook

by Gareth Jones, Marketing 31-Oct-07

Microsoft has sealed an exclusive deal with Facebook to sell advertising on the social networking site.

The agreement forms part of the software company's $240m (£117m) acquisition of a 1.6% stake in Facebook, which has almost 50m
users worldwide. Microsoft plans to acquire the stake during Facebook's

next round of financing as part of a strategy that will see the two

firms extend their existing advertising agreement.

Microsoft is already Facebook's exclusive provider of banner advertising
in the US. However, the new agreement will see the online heavyweight
become the social network's sole partner for third-party advertising on
an international level.

It is not known whether the agreement will include sponsored search
listings; this could potentially leave the door open for Facebook to
forge an exclusive search partnership with Yahoo! or Google.

The Microsoft investment values the social networking site at $15bn (£7.3bn). Research from conScore shows that membership of
Facebook grew by 6% in September, compared with 1% for rival MySpace,
which has 107m users globally.

Facebook is to expand its commercial offering in the UK following the
appointment of Yahoo!'s Blake Chandlee as sales director.