Rivals compete over Facebook

24th October 2007

Facebook is to announce a deal with either Google or Microsoft, according to the New York Post.

The newspaper reported that the two rival internet companies are set to pay between $750 million (£366 million) and $1.5 billion for a five to ten per cent share in the social network site.

Facebook announced earlier this year that it would allow third-party developers to create 'widgets' - new applications or gadgets for its users to install.

There have been several reports that Google plans to use the widgets on Facebook as a vehicle for its online advertising strategy. It apparently wants to integrate ads into the existing applications or create new branded gadgets.

Google chief executive Eric Schmidt is quoted in AdvertisingAge as saying: "How will those developers get paid for those services? We would like to have our ads in those applications."

Facebook's rival social network site MySpace announced similar plans allowing third-parties to develop on the site this week.