May be digg can afford such change. Most international and small publishers will stick to Google because:

a) Tons of advertisers
b) Google can serve to any country not just USA
c) International publishers don't have much choice
d) Finally Google just works :)

Regardless of what we think of the companies involved, I think this is great news for publishers because it encourages competition - if only for the biggest sites at this point.

What kind of competition? Competition for high-traffic "Web 2.0" news sites? I don't see how that affects most of us (for better or for worse).

I wonder if this will affect MS ads:

Facebook Founder Accused of Stealing The Idea
[webmasterworld.com...]

Marshall

THE giant is slowly but surely awakening is my view.

Let's see how long this lasts...

One important thing to remember is that Google's strength is in keyword-targeted contextual ads, and news sites (by and large) don't cater to niche audiences. For a site like Digg, AdSense may not be an ideal match, and a different vendor may offer a product that's a better fit for that site than AdSense is. (Or, in Digg's case, Microsoft could simply be offering an upfront guarantee or a hefty payout percentage in an attempt to gain market share.)

This is not the first time they are making a change. They tried YPN for a week and revered back to Google. I hope they will not revert back to google as it will lead into some embarrassment ;)

Unlike the deals that us small fry have with Google, a deal like Digg-Microsoft involve annual minimum royalties -- like Google paying $300 million a year for MySpace -- so Microsoft simply outbid Google, knowing it may take a hit in the near-term financially.

Digg has nothing to lose here. It is Microsoft, if it can't be in a much better place in three years than it is now.