Microsoft Gives Up on Yahoo!, Now Stalking Facebook!

It seems that the chase for the elusive Yahoo! was just too tiring for Microsoft so they have given up and set their sights on a new prey- Facebook!

According to the New York Times, Microsoft is set for a new deal with Facebook in which Microsoft will provide search and paid listings to the social networking site.

This news was strengthened even further when Satya Nadella, Microsoft SVP Search, Portal & Advertising Platform Group, told financial analysts "We will be providing an API to Facebook where they will create a rich search experience, including a Web search for the Facebook users. And that's something that they will launch in the fall, working with us, and it'll carry both our Web results as well as our paid search advertising."

Microsoft has had a limited search and advertising deal with Facebook for almost two years, but this new deal would be a bit different - it would include integrating Microsoft Live search as the site's search engine, and would include results from the web (including Microsoft's paid listings) at large.

Given that Facebook has been struggling to make money from its current advertising structure, it is hoped that this deal will change the tide and give Microsoft a gain over Yahoo! & Google. Jefferies & Co analyst Youssef H. Squali explains that "it's just really hard to monetize a social network, and I would argue that Google is in a better position to do it. They have thrown more resources against it and they have been at it for the last eight years." So is Microsoft trying to flog a dead horse? I guess only time will tell!

Posted by Courtney Mills at 6:42 AM GMT