Facebook To Challenge Google AdWords: Inking Deal With Microsoft To Acquire Ad Server !

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Yet another blow for Google ! Back in August last year we exposed Facebook-Microsoft Ad Server Deal (it was in early stage then) which is now in final stage. Facebook is reportedly inking the deal with Microsoft this week to venture into off-Facebook advertisement business by acquiring Atlas – an ad server Microsoft bought for $6.2 Billion back in 2007.

According to few industry executives, familiar with the deal; both the companies could sign-off anytime this week and Atlas would be controlled by Facebook to put exactly on the face of Google AdWords as a strong contender. Interestingly, Facebook is supposed to cough up less than $100 Million for Atlas as Microsoft could capitalize on the much-hyped acquisition of its time.

Since last year, Facebook has enormously focused and up-scaled itself in advertisement space by introducing various tools for advertisers – but confined into the Facebook network only.  With the upcoming acquisition Facebook could control end-to-end advertisements pipe which would allow advertisers to flex their arms beyond Facebook.

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Only $100 Million: Something Fishy?

Many are suspecting over the deal due to the nature of acquisition style. Why would Microsoft sell off an asset, which could play a vital role in next few years, for $100 Million – attracting straight loss of more than $6 Billion?

Microsoft could possibly see this as an investment rather than loss due to vested interest in Facebook. For long, Microsoft has made various failed attempts to pull down Google AdWords market share – atleast in USA. Unfortunately, despite of all boom and bang, Microsoft failed to do so.

Facebook ad Server

On the other hand, Facebook has been setting up great performing quarters one after other since last year. With more than 1 Billion users in kitty Facebook could easily create lucrative advertising market for marketers by making ads reach beyond Facebook’s primary network. This will not only benefit Facebook but also Microsoft which is enjoying direct investment in Facebook. Besides, this could also boost up Bing market as a result of robust integration between Facebook, Bing and Facebook’s ad inventory.

Ad Server: Facebook’s Power Punch

Online advertisement revenue coming via Google AdWords contributes and controls the company’s financial performance. And, this time Facebook is planning to hit hard on Google’s core strength of revenue generation. If succeeded, Facebook not only eat up Google’s advertising revenue share but will also create a set-back for Google’s other services like AdSense.

Facebook started the year with the launch of “Graph Search” – being addressed as a direct challenger for Google Search by many industry analysts. Despite of being two different worlds in terms of nature of results, features and algorithm, Graph Search has all the ability to influence internet user’s requirements and decisions. Ultimately, a internet user wants more accurate, authentic, close to need result irrespective of source of origin.

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Facebook is growing enormously. And, with such acceleration it could easily surpass Yahoo and Google in display advertisement revenue by 2015. The overall social media Ad revenue is expected to stay $8.3 Billion by 2015 and having the largest share of it; Facebook would enjoy equal benefit by then. By 2015, Facebook’s ad revenue by Desktop alone is expected to stand close to $4.50 Billion. And, if we consider the explosive adoption of Smartphone, the overall revenue figure for Facebook (Desktop + Mobile) is poised to grow further up – especially when Google is already struggling with Mobile Business revenue.

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