Microsoft Signs Ad Deal With Facebook

Chairman of Microsoft India, Ravi Venkatesan, left, shakes hands with President of Bharti Airtel Ltd., Manoj Kohli at a press conference to announce a strategic tie-up between Airtel and Microsoft, in New Delhi, India, Monday, Aug. 21, 2006. Airtel and Microsoft today launched Microsoft's Windows Mobile 5.0 platform that provides an opportunity to all Airtel customers to access corporate email via direct push technology. (AP Photo/Mustafa Quraishi) (Mustafa Quraishi - AP)

REDMOND, Wash. -- Microsoft Corp. has struck a deal to provide advertising for social networking site Facebook, in one of the first high-profile agreements for the software maker's online advertising platform.

Under the deal announced late Tuesday, Microsoft will sell and provide banner ads and sponsored links for Facebook using the adCenter online advertising platform and other in-house technology and services.

Financial terms of the deal were not disclosed. It is expected to run through mid-2009.

Microsoft and privately held Facebook said they only began discussing a deal in earnest late last week, and the companies hope the advertising will start appearing by early fall. Facebook is currently selling advertising on its own and has in the past used a couple other companies for that service, said Owen Van Natta, Facebook's chief operating officer.

Redmond-based Microsoft officially launched adCenter last spring as a way to compete with companies such as Google Inc. and Yahoo Inc., which both derive significant revenue from their online advertising networks.

Earlier this month, Google struck a deal with News Corp.'s MySpace.com, the top social-networking site, to pay at least $900 million in shared advertising revenue and become the online hangout's exclusive search provider. Under the multiyear deal, Fox Interactive Media will add Google search boxes to MySpace and other sites. Google also get first rights to sell any display ads Fox doesn't sell directly.