Facebook is one of the highest-profile clients of Microsoft’s fledgling online advertising business. However, a story in this morning’s Wall Street Journal, citing anonymous sources, says the social networking site is also working on a next-generation advertising system of its own, with ads tailored more specifically to the interests of its users.
The move “could upset Microsoft, which is itself trying to build technology to make it easier for advertisers to place targeted ads on Facebook,” the story says, adding that Microsoft declined to comment. At the same time, it notes that the agreement with Microsoft runs through 2011.
Also interesting are the financial details in the story, reporting that privately held Facebook is on pace for $30 million in profit this year, and $150 million in revenue, about half of it from the Microsoft advertising deal. That’s a profit margin of 20 percent.
This isn’t an apples-to-apples comparison, but the last time Microsoft’s Online Services Business posted an operating profit, in December 2005, its profit margin was less than 10 percent.
Microsoft, Facebook, Social Network, Social Networking, Social Media, Advertising, Online Ads
Source:? Todd Bishop’s Microsoft Blog