In the wake of MySpace totally hooking up with Google to have the search giant provide ads to the popular social networking site, Facebook has now partnered with Microsoft for the same purpose. Beginning this fall and lasting until at least mid-2007, Microsoft will serve up ads to Facebook users in both graphic and text formats. While some are saying this deal is a "consolation prize" after Microsoft didn't win the MySpace deal, an exec in Redmond emphasized that this was the right deal for both companies to make. The partnership gives Microsoft the eyeballs of Facebook's young users, a demographic everyone knows is a favorite of advertisers.

I'm going to go out on a limb and say Microsoft HAD to make this deal. I don't know what the financial terms of the deal were but I'm betting if Yahoo! was coming in with a bid of $500,000,000 the Microsoft offered $500,000,0001 and kept doing that as long as it needed to. Microsoft needs to hook up with a social networking site to help its AdCenter program get off the ground in a big way and I'm sure they worked as hard as possible to make it happen.