US-based internet company Yahoo confirmed the deal this morning, after falling behind rivals Google and Facebook in online advertising. The deal provides Yahoo with the opportunity to pay dividends, make acquisitions or buy back its own shares. It is a move which many Yahoo stockholders had called for.

In a joint statement, Yahoo and Alibaba representatives confirmed that the Chinese internet group would pay some $6.3 billion in cash and up to $800 million in Alibaba preferred stock.

It is not the first time that Alibaba has attempted to buy back this part of the company, but previous negotiations have experienced problems and multiple setbacks. Now, the Chinese group is expected to facilitate the sale of its own shares on the stock market, and ultimately buy back even more of the remaining 20% Yahoo stake.

The companies will, however, continue to work closely with one another, the statement confirms, with Alibaba keen to benefit from Yahoo’s worldwide reach. This is a key factor in the expansion of Alibaba outside of China.

Despite its limited international reach Alibaba is one of the giants of the internet industry. An Alibaba IPO would be one of the largest technology offerings in the world. The company boasts popular subsidiaries, like the immensely popular consumer to consumer selling platform Taobao. Its 370 million registered users are more than the entire population of the United States.

Google has been under investigation by the European Commission since November 2010 after its competitors complained that the search engine giant was fixing search results in order to promote its own services and demoting those of their rivals.

If Google are found to have breached EU roles, they could potentially be fined up to 10 per cent of their global advertising revenue, which currently stands at a whopping $485billion.

EU Competition Commissioner Joaquin Almunia has written to Google’s executive chairman Eric Schmidt to respond with initial proposals for reform in “a matter of weeks.”

Almunia said: “Google has repeatedly expressed to me its willingness to discuss any concerns that the Commission might have without having to engage in adversarial proceedings. This is why I’m giving Google an opportunity to offer remedies to address concerns that we have identified.”

The antitrust investigation into Google’s activities would be closed if they responded to the EU within the deadline, and Almunia stated that the EU are just as keen to avoid lengthy investigations as Google are, due to the constant advances in technology.

He said: “I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified. Restoring competition swiftly to the benefit of users at an early stage is always better than lengthy proceedings.”

Google would do well to respond to the EU’s demands within the proposed time period, so as to avoid a dragged-on investigation which could affect its advertising revenue as it puts off potential investors. However, even without this investigation, Google remains under the EU spotlight thanks to fresh complaints regarding its Android mobile operating system.

However it was a surprise whilst checking out competition that we discovered one of the giants of the online shopping world, Amazon UK, today has a Page Rank 0.

The social network was floated on the stock market when founder Mark Zuckerberg rang the opening bell on Friday morning, but the initial public offering (IPO) was hit by a series of delays and mishandled orders.

It is thought that poor design of the relevant software caused Nasdaq’s systems to fall into a “loop”, which prevented the Facebook IPO from launching on time, and led to a number of delayed and cancelled orders.

The meant that Facebook’s first day of trading was not quite as successful as had been anticipated, with the site’s shares ending the day up 0.6 per cent having risen to 18 per cent earlier in the day.

Nasdaq chief executive Robert Greifeld said he was “humbly embarrassed” at the error which effected the “biggest IPO cross in the history of mankind”.

Speaking after Nasdaq called a board meeting to discuss the issue, Greifeld said: “This was not our finest hour. We’re not happy with our performance.”

A third-party reviewer will analyse those investors who were denied orders during the opening auctions, and Nasdaq will use an accommodation pool to pay back these investors. It is thought that these refunds could add up to as much as $13million.

Orders totally around 30 million shares were placed between a 20-minute period of the opening auction morning, and Griefeld estimates that around half of these orders will involve “some level of dispute”.

This delay has obviously had a detrimental effect on Facebook’s performance in the stock market, which had been launched under a tremendous amount of hype. Having expected share prices to soar throughout the day, they ended just a fraction above their starting price, which will no doubt have come as a disappointment to Zuckerberg.

Whether its shambolic IPO launch effects Facebook’s shares in the long term remains to be seen. However, it can only have made tentative investors even more cautious about buying into the social network, at least for now.

Facebook advertising concerns those little boxes which appear to the right of you profile. Using the vast resource of information which Facebook has become, featuring the personal information and preferences of each of its users, these ads are targeted to appear beside profiles to which they are deemed most relevant and most likely to produce a result.

Featuring a headline, thumbnail image and short ad copy Facebook ads encourage the targeted user to click through and hit like. There are numerous benefits to the advertiser.

The advantages of Facebook advertising include:

• Its network reach – There are more than 30 million active Facebook accounts in the UK alone, and every consumer demographic is represented among them. This means it is possible for your advertisements to reach the right audience, and in large volumes.
• Less competition – Facebook adverts are relatively new in comparison to Google AdWords and means that the landscape is less competitive in terms of advertiser numbers.
• Lower cost-per-click – Typically Facebook’s cost per click costs are much lower than Google AdWords.
• Increased form of demographic targeting – Of course, this reach could be a hindrance were it not for Facebook Advertising’s super-targeted capabilities. Facebook’s ability to collate and dissect user information allows the advertiser to target and individual sex or age demographic, with very specific interests. This also means that businesses with a broad customer demographic can distribute ads to certain segments of it (different images and copy for different age ranges or sexes, for example). Alternatively, if your market is niche you can target a relevant audience without paying over the odds for wasted advertising space.
• Localised Advertising – It is also possible to target a particular area for your ads. This is a major factor for local businesses which can choose to only show their ads to Facebook users in a particular town.
• Potential Analysis – An important benefit of Facebook advertising is its facility for showing advertisers the potential reach of an ad during the design process. Facebook shows you how many people are likely to see your ad and you can see instantly how certain tweaks improve your ad’s potential; or do the opposite.
• Let’s Go Viral! – when a Facebook user likes your page through your advertisement, a relevant news item appears in their Facebook friend’s news feeds. This is an effective viral advertising tool as users are proven to trust the recommendations of their friends.
• Images – Unlike your typical AdWords text advert , Facebook allows you to include an image with your ad. An eye-catching image which draws the attention of your target audience is a significant advertising boon.
• Choose PPC or CPM – Similarly to AdWords, Facebook advertising works on a pay per click basis but advertisers can also choose to pay per impression if their main aim is simply to generate improved brand awareness.

There are, however, certain disadvantages to Facebook advertising which cannot be ignored:

• Work Load – Increased demographic targeting can mean more campaigns to set and manage
• Low clickthrough and conversion rate – Google AdWords usually offers a clickthrough and conversion rate of around 2%, but Facebook ads offer considerably less, which can discourage advertisers. Google AdWords’ event driven advertisements are much more in demand the display advertisements in the Facebooks’ current format.
• Irrelevant Ads – Despite the promise of highly targeting advertisement, it seems some less targeted ads can still slip through the net.
• Increased Difficulty – By its very nature, Facebook offers users plenty of content to distract them from the advertising space. Users are so busy chatting with friends and rummaging through their news feeds that they don’t often pay much attention to advertising.

In general, Facebook is a valuable advertising tool, reaching a vast yet relevant customer body. If you can successfully blend copy and image with the right target, Facebook advertising could be successful for you.

In an official blog post Google’s senior vice president of engineering, Amit Singhal, introduced the Knowledge Graph as a way to offer instant, relevant responses to search questions, providing search users with ‘things’ rather than ‘strings’, and claimed that the site’s algorithms will work more like the human brain.

Available only to US-based users at present, the Knowledge Graph is seen as the future of search and will roll out in the UK and Europe in due course.

Mr Singh used the words ‘Taj Mahal’ to demonstrate how individual keywords could have different meanings to different search engine users.

“You might think of one of the world’s most beautiful monuments, or a Grammy Award-winning musician, or possibly even a casino in Atlantic City, NJ. Or, depending on when you last ate, the nearest Indian restaurant,” he said.

With the all new Knowledge Graph, Google has been programmed to organise search results, according to 3.5 billion different attributes, and group together results which share a single interpretation of the keywords or search terms requested.

Additionally, some searches including those concerning prominent people will pull up a summary box within which Google has compiled key information on that topic.

These efforts come hot on the heels of the work of Google rivals Bing, who also intend to provide a search experience which extends beyond a list of links. Microsoft Bing is currently undergoing a range of redesigns including last week’s introduction of the ‘snapshot’ feature.

Google, however, continues in its endeavours to create a search engine which responds more fully to search queries. Their intention is to work toward the ability to answer more complex queries such as “What are the 10 deepest lakes in Africa?”

In the meantime, search users will be invited to view information relevant to their interpretation of the search word in question and be provided with the maximum resource of information possible.

Andrew Redfern, Director of Hitsearch, said: “Google is aiming to optimise the way in which it presents the large volumes of data it has access to. This means going beyond a simple keyword search to incorporate images, shopping, news, maps and Google+ data.

“This information will transform listings and make them more relevant to each individual user. This is important, because the more relevant the returns to the user, the more accurately Google can sell advertisements.”

The site is making a profit, but only in small amounts; Facebook currently makes around £1billion in revenue, which translates to a net income of £312million. Indeed, Facebook themselves have admitted that generating a profit from the site’s mobile phone users in particular, who now account for over half of all Facebook users, is an “uncertain” process which “will take time” to master.

Facebook Ads has plenty that will appeal to online marketing bods, not least the sheer size of its audience. Facebook has over 500 million users around the world, half of which are active on the site at any given day.

The biggest appeal of the platform is that you can be very specific with your ads, and ensure you are directly targeting your desired market. For example, if your campaign is aimed at 18 year old males with birthdays on May 18th that like soccer, you can choose to target only these individuals with Facebook Ads.

However, despite these obvious benefits for online marketing campaigns, it seems that many big businesses have not fully decided whether to embrace Facebook Ads or not. Take, for example, the automotive industry.

Only yesterday, it was announced that General Motors would be pulling up to $10million worth of ads from Facebook, claiming that the ads had little to no impact on whether its consumers would invest in their cars. GM said that they would still be maintaining the content on their official page, which of course generates no income for Facebook.

Meanwhile, Ford decided to pump even more revenue into its Facebook ad campaign, with Ford’s head of social media Scott Monty proclaiming that their Facebook Ads have been incredibly effective when combined with innovative content.

So, what does this all mean for the future of Facebook Ads? Well, despite its clear and innovative targeting abilities, the lack of substantial revenue and uncertainty from the bigger businesses means that Facebook Ads has a long way to go before it can class itself as a stable business model to rival Google Adwords.