Microsoft strengthens ties with Facebook in web search battle

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MOUNTAIN VIEW, Calif. (Reuters) – Microsoft CorpMSFT.O deepened its ties with social networking firm Facebook on Wednesday, beefing up its new search engine Bing to catch up with Google Inc.GOOG.O.

General view of the new head office of Microsoft Corporation in Issy-les-Moulineaux, near Paris, October 6, 2009. REUTERS / Charles Platiau / Files

Starting Wednesday, Bing will integrate content from the world’s leading social network, tailoring search results to users’ preferences based on information from their Facebook friend network – something Google doesn’t.

The world’s largest software company has stepped up efforts within its online services division – which lost $ 2.3 billion last year – to challenge the dominance of Google, the biggest engine of research to the world.

Microsoft shares ended up 2.1%. Yahoo IncYHOO.O, which has a 10-year agreement to use Bing on its sites, gained 5.7%.

“What makes Microsoft a great partner for us is that they are really the underdog here,” Facebook CEO Mark Zuckerberg told reporters at Microsoft’s offices in Silicon Valley. “Because of this, they are in a structural position where they are encouraged to do everything possible and to innovate. “

Facebook’s data provides important “signals” to help refine search results, Microsoft’s online services division president Qi Lu told reporters.

As part of their agreement, Bing will be able to access users’ publicly available Facebook profiles and their “likes” on the social networking service, and provide search results tailored to individual preferences.

Microsoft invested $ 240 million in Facebook in 2007, giving it a 1.6% stake in the world’s largest social media company with half a billion users, and the two have forged various business collaborations over the years. years.

Google remains the undisputed search leader with 66.1% of the US market in September, according to research firm comScore. Yahoo is second with 16.7% and Bing third with 11.2%.

Microsoft introduced the revamped version of its search engine last year and forged a 10-year partnership with Yahoo that merges companies’ back-end advertising systems, providing marketers with a wider audience.

Bing is now the exclusive provider of web search on Facebook, and Microsoft sells text search ads for the social networking site.

Microsoft shares closed more than 2.1%, or 51 cents, at $ 25.34.

“It’s good that they are finally trying to address these gaps in web and mobile presence,” said Kim Caughey Forrest, senior analyst at Fort Pitt Capital Group, referring to Facebook’s announcement as well as the launch. new phone software earlier this week.

“But I don’t know when it’s going to translate into dollars. As an investor, this is really what I want to know. What will this do for your results? “

(Reporting by Alexei Oreskovic, edited by Carol Bishopric)

Additional reporting by Bill Rigby, written by Edwin Chan


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