Facebook Microsoft Deal: There is no denying the fact that Google Inc (NASDAQ:GOOG) is top dog when it comes to online advertising. With that in mind, there are other companies – such as Facebook Inc (NASDAQ:FB) and Microsoft Corporation (NASDAQ:MSFT) – that are making a push.
Hedge funds, on the whole, were very bullish on Facebook last quarter. The total size of the funds we track that were invested in the company grew by nearly 40% from Q3; that’s a huge spike (see why it’s always important to pay attention to the smart money).
It appears that Facebook Inc (NASDAQ:FB) is getting serious about the future. This time around, according to Reuters, the social networking giant has “agreed to buy advertising technology from Microsoft Corp that measures the effectiveness of ads on its website, which should help in its fight with Google Inc for online advertising revenue.”
This rumor has been circulating for quite some time, but Facebook Inc (NASDAQ:FB) and Microsoft Corporation (NASDAQ:MSFT) were finally able to work out all the details.
Facebook is purchasing the Atlas Advertiser Suite. According to the same Reuters article, this was “an ad management and measurement platform that Microsoft took on with its $6.3 billion acquisition of digital ad agency aQuantive in 2007.”
At this time, it is unknown how much Facebook Inc (NASDAQ:FB) is paying Microsoft Corporation (NASDAQ:MSFT) for the technology.
Is it possible that Facebook is making this move to silence critics? Reuters explains why this may be the case:
“Facebook has long been dogged by doubts about the effectiveness of its ads and was embarrassed just days before its initial public offering in May when General Motors Co declared it was pulling the plug on all paid advertising on Facebook’s network.”
For a better idea of what FB is looking to accomplish with this purchase, take a close look at what Forrester analyst Nate Elliott had to say:
“Although the statement announcing the deal focused on Atlas’ measurement tools rather than its ad targeting technology, we expect that Atlas will soon be using Facebook’s data to target sponsorships, in-stream ads, and other rich ad formats across the entire web, and that’s big news.
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DISCLOSURE: I have no positions in any stock mentioned.
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