A year before its deal with Microsoft was set to expire, Facebook has decided to reclaim full responsibility for its display advertising. Bringing this function in-house will enable Facebook to better target users based on personal information, according to Reuters.
"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 said in a statement. "This combination of targeting and social relevance is the primary driver behind the shift in strategy."
The decision to end the companies' display agreement -- which enabled Microsoft to sell banner ads in certain sections of Facebook -- was a mutual one, Microsoft said. "Given the kinds of advertisements that make sense within a product as unique as Facebook, it just made more sense for them to take the lead on this part of their advertising strategy," wrote Jon Tinter, Bing general manager, in a blog post.
Indeed, the Facebook-Microsoft relationship will continue to be a close one. Microsoft will continue to sell text-based search ads on Facebook, and the two companies are expanding their search deal. Microsoft will further integrate its Bing search engine into Facebook, while expanding the Bing-Facebook search integration beyond the U.S.