For anyone who hasn’t heard about this yet, Digg has dropped Google as its ad provider in exchange for a three-year exclusive ad deal with Microsoft. Microsoft will be providing the display and contextual advertising on Digg, with traffic estimated at over 17 million unique monthly visitors. The switch over will take place in early August and will impact only US traffic. The two companies also agreed to work together on future technology and advertising initiatives.

“We at Digg couldn’t think of a better partner to get to where we need to go,” said Jay Adelson, the company’s chief executive officer. “They’re a young ad service, they’re innovative, they’re willing to work with us on the cutting edge.”

“We’re now positioned to provide a world-class advertising solution that builds upon Digg’s philosophy of providing a great experience for users and advertisers,” said Jay Adelson, CEO of Digg. “As the Digg audience continues to grow and diversify, we believe that this initiative with Microsoft, and the resources that it provides, will enable us to focus less on developing an advertising infrastructure and more on developing new and innovative features for the site.”

This is pretty hilarious news considering a large percentage of Digg users submit Linux and Apple articles all the time and love to bash Microsoft. I wonder what kind of effect this will have on Digg’s future popularity and whether it will change Microsoft’s dull image.

Here’s an excerpt from the press release on Yahoo!:

“Digg is the first high-profile customer for Microsoft’s adCenter platform since the company signed up Facebook, a popular social networking site, last summer.

Microsoft executives are looking to Digg and the pending acquisition of aQuantive Inc., an online advertising company, to boost adCenter’s appeal with advertisers and close the gap with Google, the leader in making money from search advertising.

“We actually now are in the forefront of what we believe is going to be the next generation of advertising,” said Steve Berkowitz, a senior vice president in Microsoft’s online services group.

Berkowitz said Microsoft is working on technology and design ideas for “bringing users to engage with the advertising more, make them part of it.”

Digg’s decision to defect may not dent Google’s balance sheet, but it’s still a blow to lose such a hot Web 2.0 property, said Chris Winfield, president of social media marketing company 10e20 LLC.

With Digg and Facebook under its belt, Microsoft may be able to seal deals with other social networking sites. For Digg, though, the decision could backfire.

“Linux and Apple have always been two of the most popular things on Digg, while Microsoft, the RIAA, things like that, have been two of the most hated things,” Winfield said.

“For a user, they look at it and say, ‘Now, all of a sudden, you’re doing a deal with the devil?’”

So what do you guys think? Will Digg’s users revolt once more? Will they just leave? Or will Digg and Facebook actually turn Microsoft’s image around?

This entry was posted on Sunday, July 29th, 2007 at 1:36 pm and is filed under Social Networks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.