Microsoft wins Facebook ad deal

Microsoft failed to sign MySpace to an advertising deal, so the software giant went out and landed Facebook, the second-largest social-networking site.

Late on Tuesday, Microsoft announced that Facebook had agreed to allow the software company to provide search and advertising listings to Facebook's 9 million users. The Wall Street Journal reported that the arrangement was for three years.

There are indications that the deal was an attempt to quickly rebound after watching Google walk away with the exclusive rights to provide advertising to MySpace's 100 million registered users earlier this month. Microsoft said in a statement that talks between it and Facebook started only last week.

Microsoft is trying to make up ground on Google in the area of search. When it comes to cutting exclusive deals with social-networking sites, one of the Web's fastest growing sectors, the first round goes to Google, which agreed to pay MySpace's parent company, News Corp., $900m (£475m) over three years as part of the arrangement. Microsoft did not disclose financial terms of its agreement with Facebook.

Microsoft will post banner advertising and sponsored links that should appear on Facebook in the autumn the companies said.

"We're excited to be innovating with Microsoft to build a world-class advertising solution that allows Facebook to deliver the best advertising experience in social media," said Owen Van Natta, chief operating officer of Facebook, in a statement.