When Microsoft invested $240 million to take a small stake in Facebook at the then gargantuan valuation of $15 billion, the deal was as much about securing an ad deal as an equity bet. But now, Microsoft is seeing some of its advertising pulled as the social network continues to build out its own ad options and revenue models.

According to BusinessWeek, Facebook has dropped Microsoft’s banner advertising in several international markets, and is considering doing the same in the US. Currently, Microsoft serves fairly generic banner advertising on Facebook, but the social network is pushing more engaging formats, like brands promoting their Pages and encouraging users and their friends to become fans.

Perhaps then, this a sign that Facebook’s social ads are performing well and its business is maturing – so much so that the company needs to grab back some of the inventory that has previously been filled by Microsoft. At this point, that looks more likely than any sort of riff between the two companies, whose deal also includes Bing powering web search results on Facebook.

Recent estimates suggest that Facebook is on track to bring in more than $700 million in revenue for 2010.

Tags: advertising, facebook, MARKETING, social media

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