Facebook Fully Takes Over Its Display Ads from Microsoft, Furthers Bing Search Deal

Microsoft's display ads began disappearing from Facebook in countries around the world starting at the beginning of the year. Now, the multi-year deal is officially completely done, a premature end given that the terms originally went to 2011. From what we've seen so far, most of the vacated inventory will be replaced with Facebook's own performance ads. With supply going up, performance ad prices will drop for a time, and become more affordable for Facebook advertisers. This move was expected, because Facebook's advertising allows for specific targeting based on a wide range of user information, and was probably monetizing better than the display ads had been. The search deal is a potentially even bigger deal, though. Especially considering the other changes Facebook has planned for search in the next few weeks. Microsoft's search engine, Bing, will be providing improved search results in Facebook, using Facebook's social graph information. From Bing manager John Tinton: As you know, Bing has been very focused on helping customers make important decisions. We believe that counsel from family and friends can be a big part of that process. Going deeper in web search experiences with Facebook, in addition to the collaboration we announced last October about bringing public data from Facebook’s API into the search experience, will enable us to do great things together for our customers. You will start to see the fruits of our expanded relationship show up in the Facebook experience over the weeks and months ahead. We are very excited about the work we have done with Facebook, and are really looking forward to the amazing things we can together do for our mutual customers in the months and years ahead. Facebook data will apparently both shape Bing search results on Facebook as well as well as on Bing's destination site and other places where Microsoft provides search. All in all, this is looking like a more serious threat to Google's core search business. Bing already has impressed many with its ability to get good results -- the harder part is breaking users' Google-focused search mentality, and it's not clear that this is happening either on Facebook or on Bing.com. However, Facebook has a massive amount of traffic, and its search feature is a core way that users find friends and other information on the site. Bing results have so far appeared at the bottom of the Facebook search page, and within a tab in the page's left-hand navigation column, but we're not sure how many Facebook users are using Bing to search the web as part of this. Now we'll see a larger implementation of Bing, integrated with Facebook -- but what exactly will this look like? We heard a clue about that yesterday. Facebook vice president of product Chris Cox talked about the plans during Facebook's 6th birthday/product launch party. Here's the transcript from the video, which you can watch at about 6:00 in, below. "... [A]nd if we could organize search by people, you could literally start typing somebody's name - like Nicholas -- and see all of the Nicholases in the world ranked according to their proximity to you in the social graph... one degree out and ranked by the people that you know and how mutual they are. This is one of the things that we're going to be rolling out over next several weeks. We think this is a pretty big innovation not just for the people around you, but for finding restaurants and all the things around you. This is a different way of searching." Facebook's new redesign also features the search box at the top center, and bigger than when it was tucked over on the right-hand side. Meanwhile, Microsoft will be running the search ads, so it will still be making money on the site. Facebook, for its part, is apparently deepening its reliance on Microsoft for some aspects of its search service, though it has been building its own search technology for years as well.

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Facebook Fully Takes Over Its Display Ads from Microsoft, Furthers Bing Search Deal

Eric Eldon

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