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Microsoft Corp. (NASDAQ:MSFT)

Microsoft & Facebook Partnership Announcement Call

October 24, 2007 5:00 pm ET

Executives

Vivek Varma - General Manager for Windows Live and MSNDivision at Microsoft

Owen Van Natta - Chief Revenue Officer for Facebook

Randy Barker - Director of Corporate Communications forFacebook

Kevin Johnson - President of the Platforms and ServicesDivision at Microsoft

Analysts

Brad Reback - CIBC World Markets

Charlie DiBona - Sanford Bernstein

Brier Dudley - Seattle Times

Michael Arrington - TechCrunch

Karen McCarthy - CNETnews.com

Josh Quittner - Fortune Magazine

Michael Liedtke - Associated Press

Earl Barker - Financial Times

Joe Menn - Los Angeles Times

Om Malik - GigaOM

Ellen Lee - San Francisco Chronicle

Sasa Zorovic - Goldman Sachs

Brian Morrisey - Adweek

Operator

Good afternoon, and thank you all for standing by fortoday's conference call. I would like to inform all participants that yourlines have been placed on a listen-only until we open for question-and-answers.I would also like to inform all participants that today’s conference is beingrecorded. If anyone does have any objection may be disconnect at this time.

I would now like to turn the conference over to Vivek Varma.Thank you, sir, you may begin.

Vivek Varma

Thank you. Thank you for joining us. I'm Vivek Varma withMicrosoft. I'm joined for the announcement today by Owen Van Natta, ChiefRevenue Officer for Facebook, Randy Barker, Director of CorporateCommunications for Facebook, and Kevin Johnson, President of the Platforms andServices Division at Microsoft.

First, a couple of housekeeping notes. There will be areplay of this call available for one week. The toll-free number is866-435-1324 and the international number is 203-369-1020. Also, a note fromMicrosoft, on today's call we will not be discussing results or guidance forour quarter just ended or the fiscal year or other topics normally handled inour earnings call, which takes place tomorrow.

I wanted to take a quick moment to run through the pressrelease. We had a couple of errors on the press release that went over thewire. There will be a reissue. I am going to now read the press release, thefinal press release between Facebook and Microsoft. And sorry for the confusionon that.

So, Facebook and Microsoft Expand Strategic Alliance. Twocompanies expand advertising deal to cover international markets. Microsoft totake equity stake in Facebook. Facebook and Microsoft Corp today announced thatthe two companies would expand their advertising partnership and that Microsoftwill take a $240 million stake -- equity stake in Facebook's next round offinancing at a $15 billion valuation.

Under the expanded strategic alliance, Microsoft will be theexclusive third party advertising platform partner for Facebook and will beginto sell advertising for Facebook internationally in addition to the UnitedStates. "We are pleased to take our Microsoft partnership to the nextlevel," said Owen Van Natta, Chief Revenue Officer, Facebook.

"We think this expanded relationship will allowFacebook to continue to innovate technology leader and major player in socialcomputing, as well as bring relevant advertising to nearly 50 million activeusers of Facebook."

"Making this investment and expanding this partnershipwill position Microsoft and Facebook to better take advantage of advertisingopportunities around the world," and is a great win not only for our twocompanies, but also our collective users and advertisers," said KevinJohnson, President of the Platform and Services Division at Microsoft.

We have partnered well over the past year and look forwardto doing some exciting things in the future. The opportunity to furthercollaborate as advertising partners is a big reason, we have decided to take anequity stake and is a strong statement of our confidence in the long-termeconomics of this partnership.

Facebook continues to experience strong growth both in theU.S. and international markets. Almost 60% of Facebook's users are outside theU.S. with an average of 200,000 new users registering each day. Facebookcontinues to be one of the most trafficked sites on the Internet.

On August 22, 2006, the companies announced a U.S.-onlystrategic alliance that named Microsoft, the exclusive provider of standardbanner advertising on Facebook, using Microsoft's digital advertising solutionand the Microsoft adCenter platform. In early 2007, the terms were extended to2011.

With that titillating reading of the press release, I'mgoing to turn it over to Owen and Kevin, and if there are any additionalcomments from the two of them, and then we'll go to questions, Operator. Sowith that, Owen?

Owen Van Natta

Thanks very much. Hey, everybody. We're really excited toannounce this partnership today, the deepening of this partnership. It'sconsistent with our focus as a company on innovation and our continued focus ongrowth.

Facebook is a technology company and these two dimensionsare areas that we focus on as a company. With nearly 50 million active users,we're really focused on creating the best user experience that we possibly canand we think that this strategic alliance even better positions us to deliveron that.

Kevin Johnson

I'll just add to Owen's comments. This is Kevin Johnson. Ithink this deal represents a major advertising syndication win for Microsoft.And I think this signals an enormous vote of confidence from our largestadvertising partners, the fact that this is a global relationship and a deeppartnership.

From my perspective, I think this is really a win-win-win. Ithink certainly from a Microsoft advertising platform standpoint this is a winbecause it increases the amount of inventory that we have on our advertisingplatform.

Certainly, working with Facebook, it's a strategic win. Andas Facebook innovates around new ad types that are unique to the socialexperience, that's going to enable us together to deliver a win to users andadvertisers. The ability to continue to drive and improve not only on the userexperience of the social networking experience, but also on the valueproposition to advertisers globally.

And so, we're very pleased with the scope and the depth ofthis partnership and it just continues to build on the great work that we'vehad the opportunity to do with Facebook over the last year.

Vivek Varma

Thank you both. With that, Operator, we'll take the firstquestion.

Question-and-Answer Session

Operator

Thank you. Our first question comes from Brad Reback. Andplease state your affiliation.

Brad Reback - CIBC World Markets

CIBC World Markets. Kevin, could you just help us out herefor a minute. Obviously, 15 billion is a pretty big number for Facebook. Inlight of Steve's comments a couple of weeks ago around the potentialfaddishness of the platform, maybe if you could put in some of your thoughtsaround that.

Kevin Johnson

Yes. I'll start by putting this in context of the overallonline advertising marketplace, which today is projected at about 40 billionand it's going to grow significantly over the next two to three years to overan $80 billion marketplace. So that's point number one. This online advertisingindustry is a big industry.

Number two, the equity stake that we're taking in Facebookis a strong statement of confidence in this partnership. It's a statement ofconfidence in the fact that our ad platform is going to get stronger andstronger and help monetizing Facebook. It's a strong vote of confidence in theinnovation that Facebook is doing to deliver on the social networkingexperience. And so, it really reflects that strong vote of confidence.

Now, if you peel back, if you look at this round offinancing they're doing that we're in for 240 million, the fact that you lookat just the run rate of users, and if you believe that they have theopportunity to get to 200 million users, 300 million users, which we believe iscertainly in the realm of possibility and on the path that they're on you canfigure out when you think that might occur.

You combine that number of users with the monetizationopportunities and you can figure out a fairly modest average revenue per userper year and you can very quickly get to these level of valuations. And so, Ithink at the end of the day, we see this growing marketplace, we believe in ourpartnership with Facebook and this is a strong statement of confidence in thispartnership and in Facebook.

Brad Reback - CIBC World Markets

Excellent. Thank you very much.

Vivek Varma

Next question, Operator?

Operator

(Operator Instructions) Our next question does come fromCharles DiBona. Please state your affiliation.

Charlie DiBona - Sanford Bernstein

Yes. Charlie DiBona with Sanford Bernstein. Kevin, can youcomment on any other--does this go beyond the advertising platform? Does thissort of telltale any sort of deeper technological relationship around themashup and development platforms that both of you guys are working on?

Kevin Johnson

Charlie, I think certainly a couple of things. Both partieshave decided that there's certain elements of this that we're not going todisclose specific terms of the agreement. But you can certainly look at whatwe're doing together and the work, whether it's things that we've done aroundsome of the live platform APIs that we've exposed and the way that those arebeing used in Facebook, the advertising relationship expanding globally, andthe fact that I think both of our companies have a strong alignment aroundinnovation and technology in a way that has a positive impact on users.

And I would say you can sit back and watch how thispartnership is going to develop. There's a lot more we're going to be doingtogether.

Charlie DiBona - Sanford Bernstein

Okay. Thank you.

Operator

Our next question comes from Brier Dudley. And please stateyour affiliation.

Brier Dudley - Seattle Times

Hi. Seattle Times. Say, Owen, can you tell us a little bitabout what happened with Google and why you chose Microsoft over Google?

Owen Van Natta

No. We were very fortunate to have a lot of folks that wereinterested in partnering with us around advertising. We've been working withMicrosoft for over a year now in the U.S. and it's a relationship that I thinkhas been really great for both of us.

We've had a lot of success. It's a partnership that sixmonths into the partnership, we decided to expand substantially in terms of theterm of the relationship. And expanding that relationship beyond the U.S.borders to make it a global relationship was directly in line with all of thoseresults and all of the experience that we've had together.

So, C technology company, which is the way that we certainlyview ourselves, being able to deepen a partnership with one of the greatesttechnology companies on the planet was absolutely a -- something that madesense for us.

Brier Dudley - Seattle Times

Great. Will this also affect the way companies canadvertise, other companies can place like small ads or we've got start-ups inSeattle that are working on things that will kind of bring advertising typestuff onto Facebook. Are there going to be new restrictions or changes in theway third parties can display ad type content on Facebook as a result of thisagreement?

Owen Van Natta

There won't be any restrictions for the third party platformdevelopers that have come to Facebook and built platform applications. And wenow have literally tens of thousands of developers who are buildingapplications on Facebook today, and they continue to have all the flexibilityand freedom to evolve their business and create a user experience that'sconsistent with what they're trying to accomplish.

What we're really excited about here is that this is goingto create new opportunities for those folks to be able to tap into Microsofttechnologies and also adCenter as we continue to go forward and find ways tomake those things available to those platform developers, should they choose totake advantage of them.

Brier Dudley - Seattle Times

All right. Thank you.

Vivek Varma

Thank you, Brier. Next question, please, Operator?

Operator

Michael Arrington. And please state your affiliation.

Michael Arrington - TechCrunch

Yes. This is Michael Arrington from TechCrunch. Are youannouncing any other investors in the round? You're not -- the press release isa little bit vague on that.

Owen Van Natta

Hey, Michael. We're not announcing any other investors in thisround. Microsoft is the investor that we're announcing today.

Michael Arrington - TechCrunch

So you're not saying if there are or are not any otherinvestors?

Owen Van Natta

Correct.

Michael Arrington - TechCrunch

Thank you.

Vivek Varma

Next question, Operator?

Operator

Karen McCarthy. And please state your affiliation.

Karen McCarthy - CNETnews.com

I'm with CNETnews.com. My question is are we going to seeany reciprocity, and if so, are we going to see Facebook integrating into anyof Microsoft's existing web properties?

Kevin Johnson

Well, Owen, do you want -- yes, let me take a shot at this.Look, we've had a broad strategic relationship and partnership. What we'reannouncing today is the expansion of our advertising platform globally.

And so, the scope of this announcement really is the factthat Facebook has made a decision for Microsoft to be the exclusive third partyadvertising platform partner for Facebook, and we're delighted to be thatpartner. And we're delighted with the broad strategic partnership that wecontinue to develop and grow with Facebook.

Karen McCarthy - CNETnews.com

Thank you.

Vivek Varma

Next question, Operator?

Operator

Josh Quittner. And please state your affiliation.

Josh Quittner - Fortune Magazine

Hi, Owen. This is Josh Quittner from Fortune Magazine. Yousaid that you were fortunate to have a lot of folks who were interested inpartnering on advertising with you guys. Can you tell us who else wasinterested?

Owen Van Natta

Yes. We're not talking about the folks that we were talkingto as part of this. We're really focused on announcing our Microsoftpartnership today. Needless to say, we've had a lot of folks that have interestin partnership with Facebook, not just in the advertising space, but otherareas as well. Today, we're really focused on our announcement with Microsoft,which we're excited about.

Vivek Varma

Operator, next question?

Operator

Thank you. Michael Liedtke, your line is open and pleasestate your affiliation.

Michael Liedtke - Associated Press

Yes, Michael Liedtke Associated Press. Just a question. Itsounded -- a few weeks ago, it sounded like Microsoft was talking about gettinga larger stake than what ultimately happened. Could you talk about how thatevolved and why you decided on this? I guess it’s a 1.6% stake now. And also,for Facebook, how this -- raising all this money may affect your plans for doingan IPO?

Kevin Johnson

Yes, I think there has been a lot of rumor and speculationabout financings and other things related to Facebook. As we sat down andstarted working through this next phase of our relationship and evolution ofthat with Microsoft, we effectively came up with the set of terms that we'reannouncing today as the ones that best fit for both companies.

And so, we think that creates the type of incentivealignment and the type of deep strategic partnership, both in terms of how wedo it internally as companies, but -- and as well as what type of message doesit send externally as well, that, again, positions us the way that bothcompanies are looking to be positioned here. So that's really -- that's reallybeen the focus here.

Michael Liedtke - Associated Press

And Facebook -- how about how does this affect Facebook'splans for an IPO?

Owen Van Natta

We're not talking about anything related to an IPO at thisstage. Again, we're really focused on and excited about the deepening of the adpartnership. We also have an equity investment that's coming alongside of thatand that's really where all our attention's been focused.

Michael Liedtke - Associated Press

Okay, thanks.

Vivek Varma

Next question, Operator?

Operator

Earl Barker. And please state your affiliation.

Earl Barker - Financial Times

Financial Times. I just wanted to clarify, is this deal justfor banner ads? And if you -- if so, if you decided to extend it into a searchdeal along the lines of the MySpace/Google deal, would that be a totallyseparate negotiation?

Owen Van Natta

Yes. We're announcing an advertising partnership today. It'sa partnership that extends across the adCenter platform for Microsoft. Andwe're not disclosing anything or announcing anything today as it relates to websearch.

Earl Barker - Financial Times

Right. But this doesn't include web search.

Owen Van Natta

No, it does not include web search.

Kevin Johnson

Yes, I think, as I mentioned, certainly both parties, we'vedecided not to disclose certain aspects of the terms of the agreement. Butcertainly I'll reinforce Owen's comments that this is really about creating awin-win-win situation, one which looks at the unique assets that Microsoftbrings to the table with our advertising platform, building on the aQuantiveacquisition, the things that we've done organically to have a global adplatform at scale.

And this deal brings more inventory and more value to thatad platform. At the same time, it enables both parties to collaborate asFacebook looks at developing new ad types that are unique to the socialexperience. And because we're doing this together as partners, this reallycreates overall end-to-end value for users and advertisers.

So you should think about this in the context of the broadvalue proposition of value delivered to the user experience and value deliveredto the advertisers in terms of the advertising capabilities that we'rebuilding.

Earl Barker - Financial Times

So are you saying it would effectively include search, ifthat were to happen? I didn't quite understand. Are you saying it does includeit or it doesn't?

Kevin Johnson

No. We're not disclosing -- there are certain terms of theagreement both parties have agreed that it -- we're just not going to discloseat this time. Really, what we're focusing on here in this announcement is theoverall ad platform and the work we're doing together.

Earl Barker - Financial Times

Okay.

Vivek Varma

Operator, next question.

Operator

Joe Menn, your line is open and please state youraffiliation.

Joe Menn - Los Angeles Times

Los Angeles Times. Is there any minimum payment that'sguaranteed under this for the right to advertise internationally or coordinatethe advertising internationally? And if so, is there a number that's going tobe disclosed today or tomorrow, because Steve Ballmer alluded to the fact thatthe partnership to date in the U.S. hasn't been immensely profitable withMicrosoft.

Kevin Johnson

Yes, I'll comment first, and then, Owen, I'll let you jumpin. This global partnership that we're announcing today, from a Microsoftperspective, we're very pleased with the economics on that commercialpartnership alone.

But the fact that we've got that commercial partnership asthe exclusive third party advertising platform partner for Facebook is oneaspect of it. It's also the strategic relationship that we have and the way thatwe're collaborating together.

The equity position we've taken, from my perspective, notonly provides the economic value we look for in terms of the advertisingrelationship, but also the broad strategic value that together we're trying toaccomplish in the marketplace.

And we're not going to disclose specific terms, but there'scertainly a responsibility that Microsoft has in this agreement. There'sresponsibility that Facebook has in this agreement, as we have in our pastpartnership. And we feel very good from a Microsoft perspective about both theshorter-term economics and the longer-term strategic value.

Owen?

Owen Van Natta

I don't have a lot to add to it except to just reinforce thepoint that -- we're really focused on is with 50 million active users we wantto try to create the best user experience we possibly can. Advertising is a bigpart of that. And we think this relationship allows us to continue to focus oninnovation and continue to focus on how it is that we create an even richerexperience for users.

Joe Menn - Los Angeles Times

Thanks.

Vivek Varma

Operator, next question?

Operator

The next question comes from Om Malik. And please state youraffiliation.

Om Malik - GigaOM

Hey, guys. Om Malik fromGigaOM. Kevin, can you give me a sense of what kind of performance you've seenon the Facebook network from your previous advertising efforts? And, Owen, ifyou can explain to me what you would be using the money for? You raised 240million. Is it for infrastructure spending or is it -- if you can give someguidance around that.

Kevin Johnson

Yes, let me start with your first question, which had to dowith sort of our Microsoft view of what we're seeing on this overall adplatform partnership with Facebook. And the short answer is that we continue tosee the monetization continue to improve and we've got many initiatives andactions underway that we believe will enable us to even drive that monetizationeven higher.

The partnership that we have with Facebook is very importantin that. And it involves work we do not only in the user experience, but thework that we do in the different mix type, the work we do with our advertisingsales force. But the trend is we see continued improvement and great progresswith the overall monetization of the Facebook inventory.

Om Malik - GigaOM

Can you give some more specifics as to like what you've seenso far, I mean, in terms of like click throughs, how many ads or what kind ofinventory status you are having?

Kevin Johnson

I'm sorry. Go ahead.

Om Malik - GigaOM

It sounds a little -- it is a little ambiguous, so I justwas hoping maybe you can frame it with numbers a little better.

Kevin Johnson

Yes. I think unfortunately, I think both parties have agreedto certain aspects to this that are part of the business arrangement and theway that we're working together that are not things that we've decided todisclose at this time.

But I certainly appreciate the question. At a high levelthough, we both see the monetization on an eCPM basis and all that goes intothat continues to improve. Owen, you want to take the second question?

Owen Van Natta

Sure, I'd be happy to. Hey, Alam. So in terms of what it isthat we're going to be using the capital for, it's really continue to fund allthe innovation and growth that we're seeing today. We've already talked alittle bit publicly about how we're planning on expanding our user base -- I'msorry, expanding our employee base dramatically next year.

We're hiring a lot of developers at Facebook. We expect toend the year at over 700 employees next year. And our user growth continues tobe explosive as well. We're doubling our user base every six months.International has become an incredibly rich area of growth for the company. Andobviously, there's a lot of technical operations that come along with that,that we want to be able to provide people with an incredibly rich experience.

And having very fast response times and having the type oftechnical infrastructure that allows us to build what it is that we can -- thatallows us to build around all the innovation that it is that we want tocontinue to do and provide people with response times and so on, that's effectivelywhat it is that we're focused on and what we'll be using our capital for.

Om Malik - GigaOM

Thank you.

Vivek Varma

Next question, Operator?

Operator

Ellen Lee. And please state your affiliation.

Ellen Lee - San Francisco Chronicle

Hi. It's Ellen with the San Francisco Chronicle. I guess Ihave two questions. One of them is just if you could provide some color on howthis deal came about. It seems like it's been -- talks have been going on forthe last couple of weeks.

I wasn't sure what the turning point was. And also, if youcan maybe also add some color on how, what kind of collaboration we're going tosee between the two companies, how deep it's going to be. Are we going to seepeople going back and forth between Redmond and Palo Alto?

Owen Van Natta

Kevin, maybe I'll start and you can jump in here.

Kevin Johnson

Great.

Owen Van Natta

We've been working with Microsoft for over a year now, andwe already have a very deep partnership. So as you can imagine, there'sdiscussions that are going on at all different levels of the company on anongoing basis.

And evolving the partnership is something that wecontinually talk about as both are focused on innovation. Microsoft is doing ahuge amount of building around adCenter. aQuantive has been a big strategicmove for them.

And you can see how those discussions would evolve into whatit is that we're able to announce today, which is a pretty substantialdeepening of the partnership, as well as an equity investment that I thinkcontinues to advance both of our goals on those different dimensions.

Kevin Johnson

Yes. The only thing I would add is that I'm in the Valley alot. And Owen and I have spent a lot of time together, especially over the lastweek or so.

But we've spent a lot of time together, and I think the timewe've spent together really having some good candid open discussions about thefuture and strategic things that are strategically important to Facebook andstrategically important to Microsoft, I think are key to any good partnership.

And I think that we've certainly had a good ongoing dialogueover the last year and certainly over the last several days. We've beenheavily, heavily involved in finalizing the details of this global partnership.

Ellen Lee - San Francisco Chronicle

So was there a turning point? Did it happen today?

Kevin Johnson

This was signed today, but…

Owen Van Natta

Partnership discussions end up having bit -- starts in theareas where they accelerate and the areas where both parties need to go awayand kind of think about how it is that you solve different problems and figureout how it is that you put these pieces together in a way that truly isaccretive for everybody users, advertisers, both companies.

It's a challenging and complex thing and this is a deepstrategic partnership that really requires a lot of that thinking to happen. Sonot inconsistent with that, these discussions have definitely had points wherethey accelerate rapidly and where both sides go away and really think about howit is that we put those things together.

Let’s say that we definitely -- as Kevin said, we've spent alot of time together and you start to get to know each other and you start to reallyfigure out how it is that you fit those pieces together. And once you can seethat pass-through, getting these partnerships completed and memorialized in acontract tends to happen pretty rapidly and I think that's consistent with whathappened here.

Ellen Lee - San Francisco Chronicle

So did it happen this morning?

Vivek Varma

Operator, we have time for two more questions.

Operator

Okay. Sasa Zorovic, your line is open. And please state youraffiliation.

Sasa Zorovic - Goldman Sachs

Hi. This is Sasa Zorovic here with Goldman Sachs. Let me askyou this. In your partnership here that you've just established with Microsoft,does it really preclude you in any way or how do you look at building your ownsales force to kind of go to customers directly here?

Owen Van Natta

Well, Microsoft is our exclusive advertising platformpartner. And again, we're announcing today that that's going from U.S.territories to expand globally. And the way that the two companies worktogether today and the way that we plan on working together going forward isthere's a huge amount of different needs that advertisers have.

We have incredibly explosive growth around users and wethink a lot of the movement that is occurring right now around thesocialization of the Internet requires a lot of innovation in terms of figuringout how to best serve advertisers and users with the best possible userexperience.

And the Microsoft partnership allows us to take the uniqueassets that adCenter has, and combine them with a lot of the unique assets thatwe have ourselves to provide that overall experience. Facebook has anadvertising sales force.

We work in coordination with Microsoft to make sure thatwe're serving advertisers and not creating confusion for advertisers. Andconsistent with that, and I think what we've done in terms of servingadvertisers well up to this point, we're going to continue to work together tomake sure that we just serve advertisers needs and we serve users needs and atthe end of the day everybody's going to win from that.

Sasa Zorovic - Goldman Sachs

Thank you.

Vivek Varma

Great. Last question, Operator?

Operator

Brian Morrisey. And please state your affiliation.

Brian Morrisey - Adweek

Hi. I'm with Adweek. I'm interested, how are you going --does this change at all how you're targeting the ads? Do you have access toFacebook's profile data in order to tailor the ads to user interest both onFacebook and perhaps on Microsoft's site?

Kevin Johnson

Owen, you want to take a shot and I'll add to it.

Owen Van Natta

Sure. User trust is core to what it is that we focus onevery day at Facebook. And making sure that we are both able to provide ahighly relevant and targeted advertising experience, not just in terms of whatads to what users, but also in terms of the context of those users who areseeing those ads and consuming that information, that's what we focus on everysingle day.

But we also at the same time want to make sure that usersfeel like we don't violate their trust in any way. And we certainly think aboutthat in terms of how it is that we use information that they provide to targetadvertisements.

And we think even more deeply about how it is thatinformation might be available to third parties. And so, again, there's justcertain details of the partnership that we're not disclosing today in terms ofhow it is that we're piecing this all together.

But consistent with what it is that I just said, we're goingto be innovating around how it is that we find the best way to target ads. Andthe other thing that I'd just point out, and Kevin, maybe you can expand onthis, is adCenter is a big platform with massive scale.

And they do targeting on many, many sites across the West.And the ability to leverage that scale is core I think to that overallstrategy. And so, I would imagine that a lot of the things that Microsoft isable to do with adCenter on other sites is going to be leveraged in terms of howit is that they are able to do that on Facebook. I don't know if you want toexpand on that, Kevin.

Kevin Johnson

Yes, I'll just add to Owen's comments. I said, look, at theend of the day, this partnership -- one of the wins this partnership deliversis a win for users and for advertisers. And that win is delivered throughhighly relevant targeted ads, things that relevant to the user experience andthat deliver a great ROI to advertisers.

And so, this partnership is all about delivering on that.And as Owen said, there's a lot of things we do together to deliver on that.The fact that with our adCenter and the continued growth of adCenter, withAtlas toolset and the broad reach we have of Atlas in advertisers with DRIVEpmin our ad network.

We've got a significant amount of opportunity to utilizethose assets in the complementary way to what we're doing with Facebook todeliver on that goal of highly relevant targeted ads to the Facebook user base.

Vivek Varma

Thank you both. With that, we will conclude this call. As Imentioned earlier, there will be a replay of this call available for a week.The toll-free number is 866-435-1324 and the international number is203-369-1020. Also, a press release would have crossed the wire during theearly part of this call. That is the correct press release. And with that we'llconclude the call. Thanks, everyone, for joining.

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