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Facebook and Microsoft in negotiations about advertising technology

Facebook is reportedly bent on striking a deal with Microsoft Corp to get its hands on advertising technology that would broaden its advertising reach to third party websites, said media reports yesterday.

Reuters said that Facebook, the largest social networking site in the world, is currently in “serious” discussions with software maker Microsoft to buy Atlas Solutions, an advertising technology acquired by Microsoft when it bought aQuantive for $6 billion in 2007, based on the reports coming from technology blogs AllThingsDigital and Business Insider.

Acquiring Atlas Solutions would significantly boost Facebook’s advertising business by extending its ads to third party websites. The move would be in direct competition with Google Inc’s DoubleClick ad network, as per reports of the blogs that did not their sources.

While no definitive price had been quoted by the planned acquisition, Business Insider said that the highest bid for Atlas Solutions when Microsoft was trying to sell it off was $30 million.

Representatives of both Microsoft and Facebook did not give any comments.

Being the number one social network in the world with about 1 billion users certainly has its perks but having a good advertising business is not one of them. Now Facebook is moving aggressively to take steps in making its advertising business better. The company is targeting ads on mobile devices as well as looking for more features that would show the effectiveness of its ads to marketers.

The bulk of Facebook’s revenue, which totals to 86 percent translating to $1.3 billion in the third quarter, came from ads in its website.

Microsoft had been trying for years to dump its Atlas online ad-serving business. About five months ago, Microsoft wrote down almost the entire value of the $6.3 billion aQuantive acquisition, including Atlas Solutions.

Some observers thing that Facebook’s plan to buy the ad-serving technology is to show that its ads are effective. Following the continous dive of its stocks and not doing well on advertising, Facebook has been looking for ways to prove that its ads are working. The company has released vollies of case studies proving that its ads help in sales of its clients.

Facebook shares dropped for 1.2 percent or 33 cents on Thursday trading, while Microsoft’s shares went up 7 cents to $26.73.

source: reuters 

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