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After losing out to Google in the race to sign up Myspace as an advertising client, Microsoft has landed a deal with the US' second largest social networking site Facebook.

In one of the first high-profile agreements for the software giant's adCenter platform, Microsoft will start providing Facebook with banner ads and sponsored links later this year.

With the arrangement expected to last until 2009, Microsoft said it would sell “graphical ad placements, as well as automated text-based advertisements targeted to content and, over time, aggregate user behaviour on an anonymous basis”.

Financial details are yet to be released, but it will be interesting to see Microsoft’s expectations of the deal’s potential returns. Google paid US$900 million for its exclusive ad-sharing deal with Myspace, announced earlier this month.

According to Nielsen/NetRatings, Myspace attracted over 45 million visitors from the US in July, while Facebook secured just under eight million.

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Published 23 August, 2006 by Richard Maven

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Ian Delaney

Ian Delaney, Crimson Business

FaceBook are interesting, though, not because of user numbers but because of a very determined approach to having a specific demographic:

(a) college students
(b) corporates
(c) armed forces

By deliberately going for older users than MySpace or bebo, they are setting themselves up as considerably more mainstream than either of those competitors. Unless, you're the number one or two social network, then you won't win on CPM in a generic landgrab, so going for a specific audience gives a far better chance of survival.

almost 10 years ago

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Sam Lempriere, HSBC Expat

I think Google backed the wrong horse...

almost 9 years ago

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John Assiter

I agree with Samuel Lempriere

almost 9 years ago

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Daniel Allman

I second that, definitely the wrong four legged creature that has been backed by Google. Good point Mr Lempriere.

almost 9 years ago

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Archie Irtizaali

Samuel Lempriere makes a fine point – congratulations on such astute judgement, and a superb horse related analogy.

over 8 years ago

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Chuck Norris

He makes one hell of a point. Crikey, that's just amazing. Simply amazing. Most inspirational piece of literature old Chuck here has read in a long time.

over 8 years ago

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Nick

I have to say I I think Samuel Lempriere has hit the nail firmly on the head I for one am not a horse lover however If I was I would call my horse Google too.

over 8 years ago

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Bill Gates

I think that Mr Lempriere comments are completely wrong. Having been in the business for quite a long time myself, who does Mr Lempriere think he is?
Facebook has proved to be sucessfull since it's launch. Facebook is bringing friends around the world together and reuniting old friends. As of July 2007, the website had the largest number of registered users among college-focused sites with over 34 million active members worldwide (also from non-collegiate networks).

From September 2006 to September 2007 it increased its ranking from 60th to 7th most visited web site, and was the number one site for photos in the United States, ahead of public sites such as Flickr, with over 8.5 million photos uploaded daily.

I think this 100% revenue share is a brilliant approach because the Facebook whole will be much greater than the sum of these parts. Thus Facebook can make a *lot* of money through the extra traffic and advertising created by websites and developers and users gravitating to the Facebook social media ecosystem. The loser in this equation would be Myspace and other sites (that would be MOST sites) that try to create social media environments but don’t share much of the revenues.

over 8 years ago

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