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November 7, 2007

Microsoft a wallflower at the big Facebook bash

Posted by David Hunter at 11:55 AM ET.

Yesterday was Facebook’s big debut party for their new platform designed to milk some cash from their faithful members via “social” advertising. Any sarcasm on my part would be superfluous after Nicholas Carr’s application of a flamethrower, but one interesting aspect was that Microsoft, who a year ago was working with Facebook “on future technology and advertising initiatives” and recently bought a slice of the company, was relegated to the position of being merely one of 60 initial advertisers on the new platform.

So where does Microsoft fit into Facebook’s overall advertising plans? Facebook CEO Mark Zuckerberg explains:

Big point: Microsoft won’t be serving Social Ads. This will be controlled by Facebook. Zuckerberg clarifies: “Microsoft is the exclusive third-party provider of IAB standard ads. This is not going to go through Microsoft. We think it is a different kind of advertising.”

Translated that means that Microsoft gets to flog banner ads and that’s it. There’s nothing wrong with that somewhat antique business, particularly since Microsoft loves ad salesmen who sell big ticket banner ad packages to big business, and that is what the Facebook deal has looked like from the start; but you can’t help but wonder where Microsoft’s pony is or even if there is one.

There are rumors that Microsoft is looking for a tie-in of Facebook with Windows Live ID which is Microsoft’s sun source of demographic data about potential ad viewers. Frankly that seems like a very bad idea for a lot of reasons including conversion costs and branding, but just wait until the privacy advocates latch on to it. Can you say “opt-out list?” I knew you could, but it is not clear that Facebook can – at least not yet.

Filed under Advertising, Alliances, Coopetition, Facebook, General Business, Legal, MSN, Microsoft, Privacy, Windows Live, Windows Live ID, adCenter

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