Two years ago, Microsoft purchased a 1.6% stake in Facebook for $240M—and with the agreement that Bing would be providing web search on the world’s most popular social network. That deal is now expanding, according to the Bing blog—to not only take in an expanded, enhanced search but also more countries around the world. Most importantly, however, Bing is giving up its claim on selling Facebook advertising.
Their enhanced search is a joint effort between FB and Bing “to provide even more compelling experiences to Facebook users.” Right now, Bing provides the basic ten blue links through Facebook’s web search option, but that will expand to include “richer answers combined with tools that help customers make faster, smarter decisions,” in keeping with Bing’s “decision engine” branding. This partnership is also growing beyond the US to a worldwide agreement.
Before the last deal, Microsoft was selling advertising for Facebook in the US. The original deal expanded that relationship for Microsoft to sell display advertising on Facebook around the world. However, that’s all going away now:
[W]e made the mutual decision that Facebook would take over responsibility for selling display advertisements on its own site. We have been working together on advertising for a long time, creating the best experience for Facebook users and advertisers. Given the kinds of advertisements that make sense within a product as unique as Facebook, it just made more sense for them to take the lead on this part of their advertising strategy. MS will continue to provide search advertisements to Facebook.
At the time of the original deal, Facebook had more than 49M active users. Now, they’re up to well over 300M. While Bing is losing that display advertising market, they may be on their way out of selling advertising anyway with the pending Yahoo/MSFT deal.
What do you think? Is this a move up or down for Facebook and Bing individually?