Facebook and Microsoft are reportedly in "serious" talks over a potential deal that could see the social network purchasing ad-serving product, Atlas Solutions from the software giant.
This is according to reports by Business Insider and AllThingsD, which cite unnamed sources close to the situation.
Microsoft acquired Atlas Solutions through its $6 billion acquisition of aQuantive in 2007. By purchasing Atlas, Facebook could begin serving ads on third-party Web sites, expanding its ad network beyond the confines of the social network itself and potentially posing a more serious challenge to Google's dominance in the advertising space.
Both Facebook and Microsoft have declined to comment on the reports. While details are scarce, Business Insider reports Microsoft has been looking to sell Atlas and the highest bid so far has been $30 million.
Facebook currently generates 86% of its revenue (which totalled $1.3 billion for the third quarter) from advertising that appears within the social network. Expanding to third-party sites would give Facebook a potentially significant new revenue stream.
Unrivalled database
Facebook is the only entity to have a database of more than a billion consumers, including their e-mail addresses and other contact details. It has been noted that even the largest publishers globally cannot rival the database that Facebook can access and target against. The social network is also poised to provide retailers and advertisers with unique insight into the path to purchase.
Facebook has been aggressively bolstering its advertising services recently, and pushing the notion that the 'click is king' mentality in online advertising has lost relevance for most brands. It was recently reported that Facebook is seeking to expand its ad-tracking programme with a new feature called 'View Tags'.
This would essentially give advertisers the ability to drop cookies on users who are shown their ads on Facebook, and allow the advertiser to check if that user bought something at a later stage and pinpoint exactly which ad that user saw.
Another conversion-tracking tool Facebook has made openly available allows advertisers to cross-check the Facebook user IDs of people who visit their sites, with the user IDs of Facebook users who were shown a particular ad. This process is done anonymously (and is encrypted), and aims to provide a better indication of how successful a particular ad campaign may have been.
An Atlas-supported ad network would take these types of conversion-tracking solutions that Facebook offers within its platform, to the broader Internet.
"What has to be thrilling to Facebook executives is that some of these Web sites will have better, more naturally-situated ad inventory than the tiny, annoying ads currently on Facebook.com. Facebook will finally be able to leverage its real asset, data, to take advantage of better inventory off of Facebook.com," says Business Insider.
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