Digg Ditches Microsoft To Sell Its Own Ads

Digg is putting an end to its exclusive ad selling relationship with Microsoft after two years, which is one year earlier than the deal was originally set to expire. Starting this Summer, the social news service will begin to rely heavily on its own internal sales force, which will be responsible for selling the majority of its ad inventory, reports Clickz.

Microsoft gets the leftovers, i.e. remnant inventory.

The partnership between Digg and Microsoft was initially supposed to last until mid-2010, but according to Mike Maser, Digg’s chief revenue and strategy officer, the two always had an understanding that Digg would at some point start selling the majority of its own ads. He added that the company’s internal sales efforts will focus on custom, non-IAB inventory combined with standardized banner ads.

This is not necessarily a sign that Microsoft was underperforming, although it’s clear Digg stands to make more money from advertising running its own sales. The move is not a surprise in that regard, and this type of switch happens regularly when websites grow enough to build their own internal sales teams.

In January, Digg hired former Yahoo sales exec Thomas Shin, its first ad sales executive, and is currently recruiting a nation-wide sales force. By the end of the year the company hopes to hire a total of five to seven reps in San Francisco, the Los Angeles area, Chicago and New York.

Ironically, Digg CEO Jay Adelson put the two following bullet points together in a blog post published earlier this year in which he highlighted what Digg’s focus in 2009 would be on its path to profitability:

– Building on our advertising infrastructure
– Building on our successful partnership with Microsoft

I guess we can now stop calling that last one a priority for this year.