Why The Bing/Facebook Search Deal Is A Turning Point For Microsoft

If you had any doubt that Microsoft will continue to step up efforts to overtake Google in world search domination by building search traffic on Bing-powered sites, consider its latest expanded relationship with Facebook.

A Microsoft spokesperson tells me Facebook will continue to power searches for people on its site, but Bing will power the Web search functions from the site. During the next year, Bing will work on various ways to interweave the information on the Web with the information on Facebook, with a goal to significantly improving users' ability to find information they rely on to make better decisions .

Increasing search traffic will have an impact on paid search and display ads, but it won't be easy. Bing has helped Microsoft post significant gains in 2009, but Google sites still account for two-thirds of 131 billion searches done worldwide in December, according to comScore. The research firm estimates that searches rose 46% in 2009, compared with the prior year.

Those 131 billion searches represent more than 4 billion searches per day, 175 million per hour, and 2.9 million per minute.  ComScore says the U.S. represents the largest individual search market in the world with 22.7 billion searches, or approximately 17% of searches conducted globally.

Among social networks, Facebook took the No. 1 spot, coming in at No. 8 overall, as its search growth from a year earlier grew 54%.

I'm not telling you anything new by saying that Bing continues to lag in search queries, compared with Google. As a marketer, you know that lack of traffic remains the biggest obstacle when it comes to allocating more of your search paid budget on Bing. But the deal with Facebook represents an interesting twist that could put Microsoft on more even footing with Google.

Analysts from research firms like comScore, eMarketer and Forrester believe Facebook will become the next important search engine tied to contextual and targeted advertising. This trend is evident in the attention that Facebook  paid to search within the site during its redesign announced last week.

Facebook's revamp puts the search box in the center at the top of the page. In the latest deal with Facebook, Microsoft -- which owns a small stake in the social network after investing $270 million in 2007 -- will no longer sell banner ads, but become the exclusive provider for text ads that appear alongside the search results on the Facebook site.

The paid-search ads are included for all non-people searches on Facebook as part of the original agreement. People on Facebook also will have direct access to Bing search results when conducting Web searches on the social network.

Facebook will determine when the features go live, but a Microsoft spokesperson told me the complete integration should roll out within the next six months.

Jon Tinter, general manager for Microsoft Bing, wrote in a blog post that "this change will also enable Microsoft to continue its focus on driving strong performing campaigns across our own social media and communications tools, including Windows Live Messenger and Hotmail, and via rich content environments across MSN and Xbox Live."

And let's not forget Microsoft's deal with Yahoo, either. Yahoo will continue to integrate search throughout its properties, but Bing technology will power the back-end system. The agreement does not include display ads, allowing both companies to compete. Yahoo will serve as the exclusive worldwide sales force for search ads.

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