Microsoft said on Friday that has lost the remainder of Facebook's display advertising business as the social network will now handle all of the graphical ads on its site.

'We made the mutual decision that Facebook would take over responsibility for selling display advertisements on its own site,' Bing general manager Jon Tinter said in a blog posting. 'We have been working together on advertising for a long time, creating the best experience for (Facebook) users and advertisers. 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.'

The deal represents a scaling-back of a 2007 pact in which Microsoft invested $240 million in Facebook and became 'the exclusive third-party advertising platform partner for Facebook,' serving up display ads, in addition to search results. Microsoft had already lost some of the international display ad business in recent months.

However, Microsoft also said that it is expanding its search advertising partnership with Facebook, with Bing serving up more detailed search results and being used for Web search internationally, in addition to the U.S.

'We have deepened our joint work together on web search to provide even more compelling experiences to Facebook users with Bing,' Tinter said. 'As part of this expanded cooperation in search, our two companies will soon provide Facebook users with a more complete search experience by providing full access to great Bing features beyond a set of links, including richer answers combined with tools that help customers make faster, smarter decisions.'

Source: Facebook takes ...