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06/08/2008  |  Microsoft offers search services on Facebook

 The software giant Microsoft is pursuing to expand its online advertising businesses and taking on the role of powering Web searches on one of the worlds most popular social networking sites - Facebook!

This search and advertising deal will give wider web-searching capabilities from within the social network for the first time. This means that with roughly 90 million active users worldwide on facebook, Microsoft's audience and demographic viewers will be soaring through the roof!! Emily Riley, an analyst with Jupiter Research, states "For most of its history, Microsoft has been known as a tech-oriented portal, while Google and Yahoo are regarded more as media aggregators." Developers of facebook are allegedly now deciding on how and where the search function from Microsoft will be incorporated into the Facebook site.

The new deal will also be made in the same week that Facebook unveiled a new idea for their site re-design called Facebook Connect. This will allow the users on facebook to sign into selected third-party sites using their existing login and will incorporate online activity into their existing Facebook feed.

But will the inclusion within this social networking site have any immediate effect for Microsoft? Many people who use social media sites still go back to their trusted search engines such as Google and yahoo etc so why should they use Microsoft's? Justin Long (editor of the InsideFacebook blog) thinks that both Microsoft and Facebook should be able to drive additional revenue through the deal. He noted that a deal which was similar to this struck between Google and social networking site My Space, boosted the search revenues of both parties.

Although, It was noted that Google has had a hard time monetizing the search deal with MySpace and blames the under performance on the difficulty with monetizing social networks in general. It's therefore possible that Microsoft will run into similar issues on Facebook.

Shar VanBoskirk (Principal analyst with tech research firm Forrester Research) stated: "This is a great deal for Microsoft, They have some really smart search technologies, but there just aren't a lot of people using them."

The new search and ad feature that is part of the expanded deal will not launch until year's end, with integration details not clear, the Journal reported. Financial terms of the Facebook deal have also not yet been disclosed.