Microsoft SVP Satya Nadella has announced that the company has expanded its deal with Facebook to integrate Microsoft’s Live Search into the social network. There are few details at this point, but Microsoft will be serving up advertising (both traditional and sponsored search results) through Facebook by the end of the year. Microsoft previously bought a $240 million stake in Facebook at a massive $15 billion valuation, in exchange for global advertising rights.
The news parallels the search deal that Google signed with MySpace in 2006, when it won the rights to provide search and advertising to the News Corp-owned social network, with a minimum rev share agreement of $900 million. Microsoft was also clamoring for search rights on MySpace at the time, but Google managed to beat it out by forging a hasty deal.
Google has had a hard time monetizing the search deal with MySpace, but it blames the under performance on the difficulty with monetizing social networks in general. It’s probable that Microsoft will run into similar issues on Facebook, but it may be just as concerned with exposing users to Live search as it is with generating revenue, at least in the short term. Back in 2006 Michael speculated that Microsoft may have been taking a loss on its initial advertising deal with Facebook, simply to beat out Google and get some traction in the advertising space. It may be taking a similar approach here.
Microsoft is eager to expand its Live search, which has languished far behind Google and Yahoo for years. In May the company launched an apparently desperate move to actually pay users for using the site through its Live Search Cashback program. That initiative has proven to be a success, increasing search usage by 15%. But Live search still trails Google and Yahoo by huge margins, accounting for only 9% of all search queries (Yahoo and Google account for 21% and 62% respectively).
NOT a 15 Billion Valuation!! It’s an investment + a search deal so part of that money was for the search deal so 15 Billion was an upper bound.
This is old news, I’m surprised to see Techcrunch late in the game on this headliner.
It is rather old, but seeing we are in a generous mood we shall let them off this once
Makes you wonder where MS plan to go to in the future with this investment
http://www.rarebeatlesmemorabilia.com/
In the meantime, you can short Juniper, since they just hired a failed Microsoft executive who also knows nothing about manufacturing hardware. What possibly could the Juniper board of directors been thinking when they hired this muppet, KJ.
Microsoft also just acquired DATAllegro minutes ago. See our blog for more details.
TL - http://www.offur.com/BetterThanTechCrunch
That’s about as exciting as farting in the bathtub.
There is no better sign for “we are the RC Cola” of the tech blog space than BetterThanTC as your name. It’s like saying that you are an also ran. Weird.
DonW
http://www.secinfo.com/dV59z.2Se.d.htm
“Also in July, we completed the disposal of the Royal Crown Cola International business and Royal Crown Cola’s private label concentrate supply for $98 million”
B tier Brands are worth more than you think my friend.
TL
B tier? Mashable is more like b tier, you are more like Z tier.
Not to mention that beverage industry revenues are like 100x (probably more) than tech blog industry, ad-generated revenues.
I hope someone puts your talent to good use soon. Is it possible you think you are worth more than you are? Try lowering expectations, start small.
I wonder how many times Captain sulu has used that comment… although I must admit it was quite amusing. This deal could really bolster microsofts search reach, domestically and internationally. If you figure that roughly 90 million people use facebook, this is a great land for MS. That’s a crap load of more search pageviews, which can bring in a significant amount of ad revenues. When does this go live? … http://www.gothamtechminute.blogspot.com
I used it exactly once. Here. Original material just for TechCrunch.
Very important and positive move for Microsoft. Get Live search in front of the younger users as much as possible. Facebook is certainly the place to be if you can’t get the MySpace users.
This is a huge branding move by Live Search for sure. However, the Live search results are still terrible.
By ‘young users’ how young do you mean? High school-college kids? It’s been forever since I’ve seen anyone go use Microsoft’s search.
Or do you mean elementary-aged students? A few months back, I volunteered at the local elementary school to teach the kids some basic searching techniques. In a room of roughly 30 students (second-graders), I had the kids go to the search engine of their choice. A few went to Yahoo. Even fewer went to Ask. The majority went to Google, and none went to MSN/Live.
i’m confused. how does this differ from the previous MSFT investment? anyone hazard a guess on the value attached to something like this?
where is google？
addebook
http://www.addebook.com
Look like some exercises before Microsoft would acquire Facebook
no ad network has been able to adequately monetize social network advertising. how is this ad deal gonnq prove anything different? appears people just dont go to social sites to buy stuff.
Branding might be a nice side effect, but it’s all about capturing a chunk of the Internet that they can get unique search results from that Google will not be able to. Why do you think They want Yahoo so bad?
Dude, someone just hijacked BusinessWeek.com’s domain! Either that or my browser is hijacked. Anyone confirm this?
live search is a bad search engine
rc
trading tennis blog
I’d thought that MS wanted to set a $15 billion valuation for Facebook to destroy the value of future options grants and keep MS employees at home. Didn’t look at deal structure closely, though - how much of the $240m was for ads?
Thomas - businessweek.com works fine here.
this is cool for msft on top of powerset. I’m excited for windows live wave 3 to be released and this search engine over time.
If $15bn was an upper bound, and that a proportion was for ads rather than the 1.67 % (?), then what IS the real valuation of FB?
Good luck to MSFT in trying to get their money back. It’s not THAT much money anyways but nobody knows how to monetize social media. In a recent Advertising 2.0, the panelists couldn’t even agree on what people do online, and why the use it.
15 billion valuation… it won’t become real because of repetition.
Most people I guess would not use search so often in a social site. They are there for latest usually.