San Francisco:Microsoft is shaking up management of its online division and strengthening its tie to Facebook in the aftermath of a failed bid to buy Yahoo to bolster its lagging Internet business.
The US software colossus told analysts that later this year Facebook will begin using its technology for online searches and paid links, which are essentially Internet ads.
Google has a similar deal with Facebook rival MySpace. Facebook currently uses its own online search tools, which have disappointed members interested in being able to scour the Internet without leaving the popular social-networking website.
Sprucing up Facebook search
Analysts believe putting its Live online search service to work for the 90 million people who use Facebook should help Microsoft’s status in an arena dominated by Internet powerhouse Google but won’t be a game-changer on its own.
Microsoft inked a deal to serve up ads on Facebook late last year when it paid $240 million for a 1.6% stake in the northern California startup.
Word of the deepened Facebook alliance comes a day after Microsoft announced a shake-up of its Platform & Services Division that includes the departure of the executive considered the architect of the failed campaign to acquire Yahoo.
The division is being split into Windows Live and Online Services groups that will report directly to Microsoft chief executive Steve Ballmer.
Platform president Kevin Johnson is leaving Microsoft. Rosoff suspects Johnson was looking to move on with his career even before the quest by Microsoft to buy Yahoo fell apart.
Microsoft offered to buy Yahoo for $44.6 billion in stock and cash on 31January but withdrew its offer on 3May, saying Yahoo refused to budge despite a bid sweetened to nearly $50 billion.
Microsoft’s online Live services have languished in distant third place behind market leading Google and second-place Yahoo.
Microsoft’s new Windows Vista operating system has been met with reluctance in the marketplace, where users complain it is incompatible with older software and that they are happier with its predecessor Windows XP.