Microsoft Now Selling Digg's Ads

Kevin Rose writes a somewhat cryptic blog post announcing that Digg has done an ad deal with Microsoft. He says it’s a deal similar to the one Facebook signed with Microsoft last year. That probably means that, as with Facebook, Digg is getting a guarantee, and Microsoft will be losing money on the deal.

The status of Digg’s relationship with Federated Media is somewhat up in the air right now. Rose says that they will still working with FM (he calls them an “awesome partner”) but in a slightly different capacity. From what we gather, FM will still be selling as many high-CPM ads into Digg as they can.

Update #1: We received this email from FM. It doesn’t clear things up much.

Dear FM Authors,

Our partners at Digg are announcing some wonderful news. Microsoft has agreed to use its technology and sales force to manage Digg’s advertising. It turns the two-way FM-Digg partnership into a three-way one, with FM primarily responsible for selling the conversational and integrated marketing deals that have been so successful for Digg in recent months. It also opens up new doors that will help FM build opportunities for all of our authors’ sites.

We at FM have always been clear about what’s important to us. That’s why our logo includes the words “Author Driven.” So we’re very happy for the team at Digg, as this affirms their success in building a great idea into a great media business in a very short time. We’re proud to have helped Digg grow to this point and prove the value of a true conversational media site. This is also an endorsement of the value of what all FM authors do, and a sign of the great potential for all of your sites.

So please join us in congratulating Digg. Here’s their blog post about it: http://blog.digg.com/?p=89. A joint release from them and Microsoft will be issued shortly.

Update #2: Microsoft press release is here. Things are still muddy.