Why Microsoft is no Britney to Facebook's Paris

A story by John Naughton in today's Observer about Microsoft's recent investment in Facebook, Microsoft makes Facebook a club you don't want to join, actually made me want to write about my former employer (Microsoft), for the first time in ages.

Firstly, I'm slightly irritated I read the story as I've been so immersed in lovely literature, but the company names appearing together leapt out at me with the loathsome tabloid appeal of a night on the town with Paris Hilton and a knickerless Britney.

I was finally driven to blog about it by the final comment,

"And what does Microsoft gets for its money? Officially, the chance to sell internet ads for Facebook outside the United States. Unofficially, the chance to spit in Google's corporate eye."

Whilst they wouldn't want to miss out on another deal after Yahoo! had a good year of it last year and Google's acquisition of Youtube, the importance of Microsoft getting its hands on the Facebook ad inventory should not be underestimated, or the deal written off as a PR move.

As Ballmer has said, Microsoft are weak in the online ad market - certainly significantly less than 25% I could find as the last estimate of Google's ad share in the US. And I'm pretty sure that globally, Google are even more dominant online. Google's scale and dominance online mean that the kind of ad revenue they can generate for 3rd-party sites already outweighs that which Yahoo! and Microsoft can offer you for similar traffic (as I understand it), so it would have taken a chunk of change to buy into the opportunity.

And if, as it seems, Facebook shapes up to be the social network that captures the imagination of everyone online and especially graduates, white-collar workers and silver surfers, they've got a chunk of really valuable users to target their ads at with an extraordinary amount of behavioural data to get targetting to pinpoint accuracy, and an enormous and growing number of page views.

There's a round-up of reactions here. I think I'm with John Battelle - if this enables Microsoft to play in a new form of advertising with a rapidly growing, globally dominant player - it's a smart move. But then again, maybe that's what Britney's people said about those fatal nights with Paris (the smart move bit, not the rest. although on second thoughts...).