Earlier this week we reached out to Facebook about the removal of skyscraper advertisements on their site. At the time, the company told us that it was bug in the U.S. and that the “problem” would soon be resolved. Today, the company has told us that all banner ads in international markets have since been removed. As a replacement, Facebook will be relying completely on the company’s internal advertisements which include social actions.

The following statement came directly from Facebook:

After talks with Microsoft, we have recently decided to stop running their banner ads on Facebook in international markets. 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. Facebook ads can also be targeted to people based on the information they provide. This combination of targeting and social relevance is the primary driver behind the shift in strategy.

While the company continues to serve banner advertisements in the United States, there’s no telling how long they will continue. By replacing the display advertisements, Facebook’s self-serve advertisements now have significantly more inventory. That also means CPCs and eCPMs have decreased through the company’s self-serve ad platform as Eric Eldon points out. There’s no doubt that this decrease is temporary, however international advertisers should most definitely take advantage of the current discount.

Is Microsoft disappointed with the new shift? While we haven’t spoken with the company, a dramatic decrease in inventory is always unwelcomed. Give that Microsoft has a large stake in Facebook though, any long-term increase in revenue is clearly in the investors’ best interest. Microsoft still has a great search deal with Facebook which helps the company promote Bing. While there were probably plenty of advertisers who wanted placement of banners on Facebook, they’ll now have to become more intimate with Facebook’s self-serve advertisement platform.

Alternatively, those companies can work with third party ad management solutions providers who have built services on top of the Facebook Ads API.

Thanks to Sam Goldfarb of Tradimax for tipping us off about this.