Microsoft Closes New Ad Deal With Facebook

Microsoft has closed a new search deal with Facebook, building on their existing display ad deal with the social networking site.

The deals comes as part of the internet companys’ planned $2.5 billion (£1.26 billion) annual spend to compete with Google, following its failure to secure a deal with Yahoo (see Microsoft Drops Yahoo! Bid).

Mircosoft currently sells and manages display ads on Facebook, following a deal between the two companies in 2006, which later saw Microsoft invest $240 million (£121 million) for a 5% stake in the site.

The recent deal will enable Facebook to offer a new integrated search toolbar, so that users can search without leaving the site, which will increase its average user time.

Although the financial details are not known as yet, reports suggest that a similiar partnership between Google and MySpace guarantees the search engine around $900 million (£453 million) over the three year deal.

Steve Ballmer, chief executive of Microsoft, reportedly told US analysts that the company would maintain its online ambitions, despite losing out on the deal with Yahoo earlier this year.

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