People Search Digest

They’re a little late to the party, but Microsoft finally one-upped Google’s search merger with social networking giant Myspace. Yesterday, Microsoft announced that their budding relationship with Facebook would soon expand to include integration of the Microsoft Live search function on the popular social networking site. Details are scant as of now, but we do know that Microsoft will be featuring advertising - both traditional and sponsored results - on Facebook. This is merely consummation of the stake Microsoft purchased in Facebook earlier this year.

Google did the same with Myspace in 2006, much to the chagrin of Microsoft, who was engaged in a fierce bidding war for the site’s favors. They were beat that time, but the recent merger with Facebook could prove to be highly profitable in the long run. Facebook membership and usage is on the rise, while Myspace is experiencing slower growth. Of course, Google has had difficulty making money from the Myspace deal, so it’s possible Microsoft will have similar trouble with Facebook. Google attributes its failures to the general difficulty of generating revenue on a social site; if Microsoft succeeds where the online giant failed, Google’s theory will be pretty much destroyed.

It could be that short term revenue gain isn’t what Microsoft is after. Some signs point to the deal being an angle by which Microsoft can wrangle more search shares. They’re undoubtedly eager to expand their Live search, even going so far as to offer compensation for users of their search engine, so temporary loss for future gain is a possible plan.

By Erik C.