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Facebook Pastes In Ads From Microsoft

By: David Utter

The deal between the two companies parallels an arrangement between MySpace and Google as powerful Internet players make their mark on social networking.

Facebook Pastes In Ads From MicrosoftFacebook has about 9 million members, far less than MySpace. The Facebook ecosystem limits its membership mostly to those who have a .edu email address, but does allow a handful of companies to participate.

The email limitation means current students and alumni of colleges and some high schools comprise the majority of Facebook's network. To Microsoft (MSFT), that means millions of people in the hottest demographic known to marketing " young and educated.

"The consumer assets brought to bear by this relationship will be very hard to match," Steve Berkowitz, senior vice president of the Online Services Group at Microsoft, said in a statement. "We believe that the combination of Microsoft and Facebook strengths will be incredibly attractive to advertisers."

Instead of Microsoft possibly ponying up to purchase Facebook outright, their choice to partner instead keeps the relative expense of participation in social networking down. Microsoft has aspirations toward social networking as well, most notably with its Windows Live Spaces service.

Facebook represents a low-hanging fruit, one where Microsoft can get in easily and deploy their technology quickly. The statement issued by the two companies noted the partnership will be a multi-year one, with Microsoft delivering banner ads and sponsored links from its digital advertising and adCenter programs to Facebook members.

The decision to partner proceeded at a rapid pace. The companies said talks only began last week, and it looks like they will not waste any time in getting the program online.

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