Microsoft and Facebook announced earlier on Friday a big change in their search and advertising relationship: that Facebook will handle all of its own graphical ads, ending a 2007 advertising agreement with Microsoft that accompanied Redmond's $240 million investment in the social network. At the same time, a more enhanced version of Microsoft's Bing search engine will be available through Facebook.
But Facebook, as it turns out, is getting rid of traditional banner ads altogether.
"We recently stopped displaying Microsoft's banner ads in some international markets. After additional talks with Microsoft, we have agreed to stop running all banner ads on Facebook," a statement from Facebook read. "Ad formats that feature social actions perform better and provide a better user experience since they are more consistent with the look and feel of Facebook."
The company would be referring there to Facebook Ads, the product that it originally unveiled in the fall of 2007 and has since groomed into the "engagement ads" frequently seen on the site. These ads often involve members sending virtual gifts, voting in a poll, or signing up to an advertiser's "fan page" on the social network.
"Facebook ads can also be targeted to people based on the information they provide," the statement continued. "This combination of targeting and social relevance is the primary driver behind the shift in strategy. Microsoft has been a great partner and we continue to work with them in other areas, including search."
My big prediction now that Facebook's officially on its own in terms of ad sales? The company is overdue for the hire of a high-profile, prominent sales executive who can really work Madison Avenue--the sort of role that Tim Armstrong, now the CEO of AOL, used to play in his days at Google. With a continued shift away from the display ads that are more familiar to the media industry, Facebook will need to have someone who's able to give the hard sell and has the industry connections to match it.
Currently, the company's most prominent sales pitches come from Sheryl Sandberg, the company's chief operating officer--also a former Google sales exec--who presumably has a whole lot else on her plate. Facebook, meanwhile, has plenty of rank-and-file ad sales positions listed on its jobs site, but hasn't said anything about whether it's ramping up hires.