Microsoft Now Selling Digg’s Ads
Michael Arrington
62 comments »
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.
I don’t think I have ever read a post on this site that said a positive word about Microsoft. You would tend to believe by this site that Microsoft is two steps from going out of business and the MAC and the PC were really competitors.
I understand preferences, but fairness should come into play at some point!
http://www.techcrunch.com/2007.....ot-richer/
http://www.techcrunch.com/2007.....important/
I can go on if you like. Many people have accused me of being too pro-microsoft. Yesterday at an event I told an audience of 500 that Vista was better than OSX.
Also, I’m not being negative towards Microsoft in this post. I’m merely stating what I believe are the facts. MS needs to buy its way into this business to compete with Google. These deals are one way of doing it. Acquiring Yahoo would be another.
Arrington is right — this deal is trousers for MSFT. Large online publishers need a behavioral/performance network in order to compete:
Google + Doubleclick
AOL + Ad.com + Tacoma
Yahoo + Rightmedia
MSN + Aquanantative
All of these are good moves because they facilitate the profitable arbitrage that makes online advertising tick.
I’m not sure how Digg fits into this model. Sure it has great reach, but IMHO the behavioral targeting is limited from a standpoint of monetization.
Would you pay to stand in front of the Digg crowd and *gasp* try to sell something?
http://www.microsoft.com/Press.....iggPR.mspx
MS press release
Microsoft needs deals like this - they are probably the only company that can exert more muscle with cash than Google.
Of course the Digg’rs are already bashing the deal - and many say they use ad blockers.
I wonder if snorg tees and the big chested ladies will remain.
I wonder if snorg tees sold any shirts?
To buy Digg would only cost Microsoft around $150 million, surely this would be ideal for Microsoft. Given Digg’s recent growth now would be a good time to buy.
chris @ http://www.frostfirebuzz.com - Internet news
Michael, I knew the Silverlight example was coming and I can respect that. Maybe it is partly the posts and then the Microsoft hate is exponentially multiplied in the comments.
Microsoft is still in the dog pound, just the old dog, which requires them more calculation time before they go in for the kill.
Rex
Why buy Digg? What’s the value that Digg brings to the table? Just a horde of users? It’s as easy to monetize as YouTube! [/sarcasm] Whatever value Digg has it will be capped by the exit that Stumbleupon took.
In which ways do you feel Vista is better than the current version of OS X? I use both at work, developing on Vista (.NET) and doing everything else on the Mac. They both are really similar, but for overall ease of use and the consistent UI (which contributes to ease of use), I am loving the Mac.
Wow. Super Spin going on here.
MGZ - that’s for another post.
Back to the topic at hand:
http://www.drivl.com/posts/view/731
Something to consider: Yes, Microsoft could be losing money on the deal, but it could also be a test to see how well their ads perform before they consider an acquisition. It will give them the browsing habits of Digg’s readers, which type of verticals perform best on the site, demographics etc. It’s like test driving a car before you buy.
Or this simply could not be the case and MS is simply looking to close a deal with Digg before Yahoo or Google do. Better to lose money now in the beginning than lose their business for years - or forever right?
Isn’t the real story about the relationship being formed between FM and MS?
digg is crap
LOL Michael. I look forward to your post about Vista > OSX. IMO Vista isnt even > Windows 98.
As for the MSFT deal here.. I can’t say I am in favor of it, but I found it bizzare that FM spun it like it was a positive for them that MS was taking over probably one of their larger clients.
William
http://www.sugarattack.com
Hey, if it’s going to bring up Digg’s CPM rates then more power to them. From my experience, though, Digg users don’t click on ads, so it might be better for branding purposes.
@ Bill: Agree with you. From everything I have heard the pageviews/visitors on Digg is fairly high which will keep the click-through rates low. There are only so many advertisers that FM can put on Digg once before the list ends.
the diggers surely would like any partnership with microsoft:)
kevin made a smart note sounding to the diggers like he fooled microsoft:)
that was the only way diggers would buy it:)
p.s. if microsoft will buy digg the next day more than half of diggers will leave the site, i really think.
sorry, typo, diggers would not like any partnership with microsoft:)
Digg is a great site, but the diggers can be a tough audience to market to.
Statistically, I think it’s been said most people don’t like Vista. I don’t like Vista overall, but the photo editing tools are nice and the spam filter on my email is insane.
It seems to cause a lot of other little headaches though.
If you can’t beat ‘em, buy ‘em.
The die hard digg fans are going to hate this. They (myself included) can be quite anti-MS at some times.
-Chris
http://www.nerdcouncil.com
Is TC still using FM - on that MS fiasco last month you noted that you were looking for a new ad partner - is all well now on the FM front for TC?
Why would “die hard digg fans” will hate this? How does it matter if the ads are not more intrusive than they are now?
They (FM) appear to have lost their Wikia deal to LookSmart, now Digg? As Battelle would say, innaresting!
Microsoft has avoided the whole “web 2.0″ madness till now and they will most likely wait till things are more clear. They will probably do one good move and become a major player in that field.
Buying Yahoo would be the best option since they would get a strong position in search, online ads and access in their social networking sites.
Time will tell i guess.
It sounds to me like a face-saver for FM, since they basially lost Digg’s business. Sure, they can still do ‘conversational’ stuff, presumably if MS says it’s OK, but they basically just lost their biggest site.
What’s the over/under on FM deadpooling in 2008?
Why would MS buy yahoo? Nothing technically compelling to MS about yahoo (all they have is users). MS buying FM is more likely, but still a stretch.
Digg is not the “right” audience for FM’s “conversations” anyway.
Also they posted this job on Linked in
Director of Advertising Operations at Digg
Description
JOB PURPOSE/OBJECTIVE:
This high profile opportunity will own and drive the advertising operations for one of the hottest sites on the web today. The position will also serve as the primary interface to Digg’s internal and third party ad sales networks to ensure that advertising operations are fully optimized and the company is meeting and exceeding its delivery obligations to its network partners and clients. Additional responsibilities include optimizing advertising performance related to site design, data analysis, predictive capabilities and recommending solutions that increase ad inventory and monetization potential.
More details:
http://www.linkedin.com/jobs?v....._recentjob
My prediction: FM will either become non-existent in the next two years, or will be bought-out and scrapped… things seem to be going down hill for them. Hell, we applied to them 5 or 6 months ago and they never even replied to us. That was 400,000+ targeted unique users each month that they could have added to their inventory. Microsoft, want to contact me? You can steal us from Adsense for the right price.
Interesting. Somewhat surprising move, as Digg isn’t very pro-microsoft (as a digger I speak). I’d have to agree that it is hard to advertise to diggers - the ads have fell essentially short when I’ve visited - I’ve only ever clicked on a few in spite of visiting the site nearly daily.
Shouldn’t MSN prove they can properly run their own portal before they branch out to sell other sites?
This is a joke!
OH! Great MSN junk ads
i think it’s a smart move by MSFT. They should have been buying up volume a long time ago. Frankly, they need to buy these types of properties, not just sell through them (the guarantee prices are usually very high).
From the Microsoft Press Release:
“Microsoft will be the exclusive provider of display and contextual advertising on Digg”
Batelle can spin this all he wants. The fact of the matter is that he got booted out. He now has to stand in line with the 80 other networks/advertisers that will want to buy inventory on Digg (exactly how things are on Facebook as well).
The funny part about all this is to see Batelle trying to “spin” this in his favor. Almost challenging the intelligence of the people in this industry. Fact is that FM has no technology and no competitive advantage. And its starting to catch up with their business model.
@Erich: Second vote for: deadpool 2008
That’s funny. Digg is full with dumbass Mactards.