Microsoft strikes ad deal with Facebook

Microsoft has signed a deal with Facebook, the second-largest social networking site in the US, to provide online ad services. By Mark Sweney.

Microsoft has signed a deal with Facebook, the second largest social networking site in the US after MySpace, to provide online advertising services.

Under the three-year deal, Microsoft will be the exclusive seller and provider of banner advertising and sponsored links for the site, which is popular primarily among US college students.

Earlier this month, Google saw off competition from Microsoft and AOL to strike a similar deal with News Corporation's MySpace, paying at least $900m (£476m) in shared advertising revenue to become the exclusive search provider.

The terms of Microsoft's deal, one of the first using the software company's new online advertising platform AdCenter, have not been disclosed.

However, it is likely to be worth significantly less than Google's deal with MySpace, with one analyst describing it as a "consolation prize".

Facebook has 9 million registered users, while MySpace.com recently notched up 100 million registered profiles.

Steve Berkowitz, the senior vice-president of the online services group at Microsoft, said: "Our collaboration with Facebook is about joining our cutting-edge advertising technology and sales force with a true innovator in social networking."

Facebook, which grew out of a student website at Harvard University, was founded in February 2004 by Mark Zuckerberg and connects people based on where they are, or where they work or attend school.

Advertising group IPG, owner of agencies including Lowe and McCann Erickson, took a 0.5% stake in Facebook earlier this year.

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Mark Sweney

The GuardianTramp

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