Microsoft Investment

Microsoft, which had inked a seemingly innocent ad deal with Facebook in October 2006, agreed to infuse Facebook with $240 million in cash to grow. Microsoft also became the exclusive third-party advertising platform partner for Facebook, and further agreed to sell advertising for the company internationally as well as in the U.S. Microsoft and Facebook’s partnership has evolved and matured each year. “I feel that this event is what made Google so antagonistic against Facebook—because it actively rejected Google’s embrace for Microsoft’s purse. As a result, it labeled Facebook more as a threat to its online dominance than as a potential partner,” wrote Facebook employee Jinghao Yan on Q&A Website Quora.

Just three weeks later, Google launched OpenSocial, a set of application programming interfaces that will allow programmers to write social applications that will work on LinkedIn, Friendster and other social-networking sites. This deal answered Facebook’s opening of its platform to third-party developers in May. This effort involved third-party applications and only Facebook, setting up a polarization between Facebook and its developer partners and everyone else. Adam D’Angelo, at the time an engineer at Facebook, who left to create Q&A Website Quora added this juicy tidbit on Quora: “After seeing the success of the Facebook Platform, Google went and got all the other social networks committed to OpenSocial under NDA [non-disclosure agreement] without telling Facebook, then broke the news to Facebook and tried to force them to participate.”

Facebook made its intentions toward Google’s OpenSocial play clear when it declined to join the OpenSocial Foundation in March 2008. “As the largest contributor to the meme-cached system, Facebook has long been a leader and supporter of open-source initiatives, but will not join the foundation,” a spokesperson for the company told eWEEK at the time. Facebook clearly saw greater value in its own platform.

In another major event, whose ramifications were really felt in 2010 when Facebook legitimized its social ad efforts, the social network lured Sheryl Sandberg from Google, where she had served as vice president of global online sales and operations, to become COO at Facebook.

Google in May 2008 introduced Google Friend Connect, which lets Website operators add a snippet of code to their Websites to add user registration, invitations, member galleries, message posting, reviews and other features. It was another answer to let Website publishers foster social interaction between users.

Facebook one week later blocked Google’s Friend Connect service. Facebook engineer Charlie Cheever said in a May 15 blog post that after testing Friend Connect, Facebook found that it redistributes user information from Facebook to other developers without users’ knowledge, which is a gross violation of the company’s privacy rules. “We never handle passwords from other sites; we never store social graph data from other sites; and we never pass users’ social network IDs to Friend Connected sites or applications,” Google told eWEEK.

Google formalized the Data Liberation Front in September 2009 to let users take their Google Web service data with them should they choose to leave Google’s programs. It’s a shot across Facebook’s walled garden.

In November 2010, Google altered its Google Contacts Data API terms of service to prevent Facebook and other companies from automatically pulling Gmail contacts into their service. Google allows companies that leverage its API to let users export their data from Google as long as these companies enable the same practice of exporting data, including contacts. Enforcement is on a case-by-case basis. In other words, Google is calling for a quid pro quo on contact data. A Google spokesperson told eWEEK: “We have decided to change our approach slightly to reflect the fact that users often aren’t aware that once they have imported their contacts into sites like Facebook, they are effectively trapped.”

Peeved at what it saw as a double standard of Google being open where it’s convenient, Facebook installed an easy download button that deep links to Google’s own Data Liberation tool. The workaround effectively let users continue to automatically import Gmail contacts to Facebook. Facebook Platform engineer Mike Vernal ripped Google for being hypocritical, noting that Google in October 2009 broke its own export tool by preventing its orkut social network users from exporting contact data to Facebook. “We strongly hope that Google turns back on their API and doesn’t come up with yet another excuse to prevent their users from leaving Google products to use ones they like better instead,” Vernal wrote.

Things were quiet for a while, though Google engineers continued to leave for Facebook. However, Google engineers who stayed continued to work full steam ahead on releasing the company’s answer to Facebook. Google+ launched June 28 to limited beta, drawing rave reviews and over 20 million users in three weeks. The service, ironically, leverages a Circles social-identity construct, conceived by current Facebook engineer Paul Adams.

On Quora, a new titillating theme emerged in July. One user wrote: “I’ve heard from a reliable source that Facebook has gone into lockdown and cancelled various summer events in response to Google+. Is there truth to this?” An anonymous user wrote: “Yes, as an engineer at Facebook I can absolutely confirm this. I can tell that over the last couple of weeks, upper management has been more stressed than usual. There are more hurried meetings. I think that much of Facebook’s confidence and maybe even valuation was based on the assumption that it’s the only game in town. Now that’s no longer.” Wow!

After seeing Microsoft’s online services unit suffer another losing quarter (and $2.6 billion in the latest fiscal year!), Reuters bloggers Robert Cryan and Martin Hutchinson suggest Facebook should take Bing off Microsoft’s hands. “Bing is the industrys distant No. 2 after Google,” they wrote. “It has become a distraction for the software giant—one that costs shareholders dearly…Facebook, or even Apple, might make a better home for Bing.” The problem with this, as eWEEK sees it, is Facebook is already closely partnered with Microsoft, including Bing, which powers Facebook’s external search. What more could it gain by picking up this bloat besides search talent? The problem with Bing (other than the fact that Google has sewn up the search market) isn’t that it’s bad or busted; it’s Microsoft’s brand, or its lack of positive perception, that is killing it. One could argue that Bing is tainted by Microsoft and that Facebook should stay away from it.