Microsoft friends Facebook, strikes search ad deal

Is Facebook getting chummier with Microsoft?

Microsoft said today it will bring its Web search ads to the popular social networking site by year's end, extending a partnership between the two companies.

Microsoft, which owns a small stake in Facebook, already has an exclusive agreement to deliver banner ads on Facebook pages.

It's unclear if the deal will be exclusive. But it's yet another move from Microsoft against its arch nemesis and search market leader Google.

The deal is only in the U.S., Facebook says. Facebook has yet to work out the details of how it will display Web search on its site.

"Facebook is working with Microsoft to design the best search experience for Facebook's users and advertisers," a spokesman said in an e-mail.

Microsoft outmaneuvered Google to buy a 1.6% stake in Facebook for $240 million in October. It also struck an advertising deal.

The expansion of that deal was announced during a meeting at Microsoft's Redmond, Wash., headquarters, attended by our intrepid Microsoft reporter Joseph Menn. The announcement comes as Chief Executive Steve Ballmer argues that Microsoft must continue to focus on search despite collapsed talks to buy Yahoo.

-- Jessica Guynn

Photo: Facebook founder and Chief Executive Mark Zuckerberg. Credit: Paul Sakuma / Associated Press