Digg Goes with Microsoft for Online Advertising

Social news site Digg has signed an exclusive advertising agreement with Microsoft for its U.S.-based text and banner ads for the next three years. The deal replaces a previous relationship with Google

By partnering with Microsoft for its ad network sales, Digg will be able to “completely focus on new feature development,” said Kevin Rose, founder and chief architect of Digg, on the company’s blog. Over the past year Digg has seen tremendous growth, with 4.4 million unique visitors in the U.S. for June 2007, a 222% increase over the same month last year, according to comScore. Internationally Digg had 9.5 million visitors in June, representing 296% growth over the previous year.

“This one is straight forward. It’s a great deal for us and we’ll be off as quickly as we can selling and serving display banner ads,” said Adam Sohn, director, Online Services Group for Microsoft. “They are a very interesting company, and most of Microsoft’s employees are deep users of this site.”

Digg had previously worked with Google and Federated Media to sell its ads, and it will keep its relationship with the latter for special projects, integrated sponsorships and custom programs. In a blog post, Federated Media founder John Battelle said the deal with Microsoft was not surprising as “It’s no secret that Digg is the kind of property — like Facebook — that was bound to get the attention of the Big Guys as they continue to play an ever more fascinating game of Internet chess.”

Sohn said Microsoft welcomed the opportunity to work with Federated Media on ad representation for Digg.

“Ultimately we’ll do the selling for the display and the text stuff and the serving, and Federated Media will do the innovative high touch sponsorship campaigns kinds of things,” he said. “Having Federated at the table thinking about the advertising opportunities will be great.”

Rose, Battelle and Sohn all compared the deal with a similar agreement Microsoft struck with Facebook. Sohn said the two partnerships were steps in Microsoft’s strategy to craft a means of reaching the long tail audience for advertising. Both relationships, he said, support Microsoft’s “deep interest in allowing consumers to experience the online world with their relationships close at hand.”

“Having a company like Digg that is at the cutting edge of the community driven stuff, and Facebook at the cutting edge of the social networking stuff, that’s’ where there is the meeting of the minds,” he said. “We’re doing strategic deals to bring the right audience to bear. We’re starting to put some very attractive pieces in place to let digital marketers and publishers really connect with an important and high quality audience.”