The two companies plan to work together on future technology and advertising initiatives.
Microsoft will broker online ad sales for social news site Digg.com, the two companies said on Wednesday.
Microsoft also announced a similar deal this week involving its in-game advertising subsidiary Massive. Massive will serve contextual ads inside five select Electronic Arts video games.
"This move gives us an advertising partner with a larger organization and a more scalable technology platform to keep pace with Digg's growth," said Kevin Rose, CEO of Digg, in a blog post. "Best of all, it lets the Digg team completely focus on new feature development."
Rose said that Federated Media, which had been the company's advertising partner for the past year and a half, would continue working with Digg on integrated sponsorships and custom programs.
Digg is visited by more than 17 million unique visitors every month, according to Microsoft. Microsoft said the two companies plan "to work together on future technology and advertising initiatives."
Last August, Microsoft struck a deal to be the exclusive provider of banner ads and sponsored links on Facebook.
For Google, where success is seen largely as a product of the company's technological prowess, Microsoft's deals have to be troubling. Microsoft's continued partnership wins suggest that distribution matters at least as much as technology. And Ph.D.s are wasted on contract negotiations.
Digg users appear to be taking the news in stride. "I might be upset if it were not for my glorious Adblock Plus that prevents me from wasting my time with those silly ads," Peter Luckow said in a comment.
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