Microsoft’s latest effort to gain relevance in the search wars is about to get a whole lot more interesting.

According to All Things Digital, the company is set to announce deals with both Twitter and Facebook to integrate status updates into its Bing search engine.

Details are expected to be announced later today at the Web 2.0 Summit, but the stage has been building for this for some time. Microsoft invested $240 million in Facebook back in 2007, and has since signed search and advertising deals with the social network.

Meanwhile, Twitter has been known to be exploring search partnerships for at least the past month, though it’s long been suspected that the company would eventually eye significant revenue in this space. Although Twitter has been said to be willing to offer a full stream of tweets to search providers on a non-exclusive basis, it would appear that Microsoft has beaten Google to the punch in making it happen.

In All Things Digital’s latest report, both of the leading social sites are said to be talking to Google, so Bing’s advantage may be short lived, though it will be “weeks, if not months” until we see any actual integration go live.

More to come …

Last week launched the social revolution for search. Microsoft’s Bing fired the first shot by announcing search deals with Twitter and Facebook and, at the Web 2.0 Summit, launching its Twitter integration. Google fired back almost immediately though, completing its own deal with Twitter and, perhaps more importantly, announcing a new feature: Social Search.

Social search, demoed at the Web 2.0 Summit by Google’s VP of Search Marissa Mayer, combines results from your friend’s blogs, Flickr, Twitter, FriendFeed and a wide variety of other social media sites (so long as your friends have connected their social accounts to their Google with Google’s regular search results. The feature will go live this afternoon, and can be found within Google Labs.

The experimental feature, once activated, will display relevant search results from your social circle at the bottom of the search results page. This could be travel photos from your friends, a recent blog post, a set of status updates, or other information Google pulls.

For now, the feature is opt-in, only affects certain searches, and appear at the bottom of the search results page. However, we won’t be surprised if Social Search results start blending into regular search higher up the page. After all, your social circle is often far more relevant than even the top Wikipedia article on a subject. Google seems to betting on it in a big way.

Here’s a demo of social search from Google: