Microsoft's online efforts lose money even as Google's produce a billion dollars in profit each quarter. But Microsoft hopes the Facebook alliance gives it a leg up on the cutting edge of Web advertising, where the playing field isn't as tilted in Google's favor.
As one example, Facebook plans to roll out a system for aiming ads at users based on what interests are listed on their profile pages.
Microsoft stands to profit if Facebook advertising takes off. But that seemed secondary to the triumph of beating Google.
"This is the site that has the attention, buzz and momentum," said Greg Sterling, principal of research firm Sterling Market Intelligence. "It's the personification of the whole social networking phenomenon."
The transaction left Google in the unaccustomed role of a runner-up. At its annual analyst day here Wednesday, company executives wouldn't comment directly on the deal, but they generally groused about current Internet valuations and touted the success of their own Orkut social network in countries such as Brazil.
"We don't feel at a higher level that we need to own everything successful on the Internet," co-founder Sergey Brin said.
joseph.menn@latimes.com
jessica.guynn@latimes.com
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Menn reported from Los Angeles, Guynn from Mountain View.
