Facebook drops Microsoft ads; will sell its own


Facebook has decided to strike out on its own in the ad arena, ending its display ad deal with Microsoft. Microsoft had been selling display ads on Facebook since 2006, and the current deal between the two companies was supposed to last until 2011. However, the ties between the two companies have not been severed completely. Microsoft will continue to be Facebook’s search provider and will make more features from its search engine, Bing, available to Facebook users.

RBR-TVBR observation: Most of the revenue generation to date with Facebook is all of the marketplace and games apps. There are local ads here and there, but what FB really would like to see is big-dollar advertisers — not from local community colleges, but Ford, P&G, Wal-Mart and Target. It certainly has the growth curve in users, but revenue needs to catch up as well.