Google’s relationship with the other major social network MySpace may have proven disappointing, but Microsoft seems to think they can do it right. They already have a strong interest in Facebook to the tune of a $240 million dollar stake they took in October. The youthful founder, Mark Zuckerberg has resisted the temptation of a sellout in the past, citing a wish for an initial public offering instead.
Monetizing social networks is the next big step in online commerce, and advertising will play a major part, but the methodology is as yet unclear.
Social networks work differently than traditional internet models, and advertising tactics must change to accommodate this new venue. Facebook has a strong following; with over 70 million active users it is the 2nd most trafficked social media site world-wide, and the 6th trafficked website, according to comScore.
Recently, Facebook has strengthened its position with recruits from – of all places! – the ranks of Google’s top brass. The earlier defectors, Ethan Beard and Benjamin Ling, were followed by Sheryl Sandberg (a former Google exec who now fills the #2 spot at Facebook) and most recently Elliot Schrage, another VP who left Google to take over a communications and marketing position at Facebook. Even the chef has reputedly turned in his notice at Google in favor of a spot at Palo Alto.
But what does all this mean for Microsoft? CEO Steve Ballmer supposedly turned down Yahoo because of its proposed tie to Google through outsourced advertising. Perhaps Facebook’s own resistance to the Google’s OpenSocial alliance makes the network even more palatable to the software provider, which formed its own partnership with Facebook and four other social networks back in March.
Officials declined to comment on the rumors of a Microsoft bid for the company, and Microsoft is also keeping silent. Is an offer really in the works, or is Microsoft simply turning up the heat in an effort to bring Yahoo to its knees?
Currently, it is business as usual at Facebook, which just reached a user safety agreement with most of the US attorney generals to tighten its protocols and protect underage users. The company recently unveiled its new real-time chat interface and is expected to launch an improved profile design shortly.
Tags: Facebook, Microsoft, social network