As rumored earlier, Qi Lu did in fact take the stage at Web 2.0 Summit in San Francisco and announce search partnerships with Twitter and Facebook. TechCrunch had the lowdown on Lu's speech, and the Bing Search blog has a post, as well. The word is largely mum on Facebook - Lu said that announcement would come later.
However, Lu did launch into greater detail about the Twitter partnership. It's non-exclusive, which, yes, means Google can get a search deal with Twitter as well. It's also part of "Bing Wave 2," which is what Microsoft is calling a flurry of new features that are being added to Bing post-initial launch.
Bing will de-dupe repeated Tweets and use content, follower numbers, and ReTweet quantity to help determine quality. Spam will be filtered out.
Trending topics will be displayed in a tag cloud and Bing will show you the final URL of a bit.ly shortened URL so you won't be tricked into going to sites you don't wish to visit.
4:30pm EST 3:30pm EST, you can preview the new Twitter integration at http://www.bing.com/twitter.
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