Microsoft Signs Digg To Exclusive Display, Contextual Ad Deal; Google Loses Out, FM Keeps Hand In

Microsoft (Nasdaq: MSFT) has another ad deal with a buzzy, big Web 2.0 site … it will be the exclusive provider of display and contextual advertising for Digg, which boasts 17 million-plus monthly uniques. The three-year deal also includes “future technology and advertising initiatives.” No terms disclosed. The usual comparisons are being dragged up — $900 million by Google for MySpace over three-plus years, for instance — but as popular as Digg is, it doesn’t have MySpace or Facebook page views, so think lower.

The move comes at the expense of Digg’s current ad network, Federated Media Publishing, and of Google, which had the text franchise. FM isn’t being cut out completely, though — the ad net will continue to handle integrated sponsorships and custom programs, and it gains some access at Microsoft. MSFT release | FM

Digg’s Kevin Rose explained the move: “This move gives us an advertising partner with a larger organization and a more scalable technology platform to keep pace with Digg