Microsoft Employs the Smartest Strategy Yet (Against Digg)

Since its launch in 2004, Digg has seen strong and largely unstoppable growth. While there has been no dearth of competitors and imitators, none have been able to upset Digg's lead in the social media space and in its goal towards democratizing the web. Out of all this competition, who would've thought that Microsoft would come up with the best strategy against Digg (perhaps even inadvertently)?

Marshall Kirkpatrick takes a look at a recently launched Microsoft service called MSN Reporter. The service is currently in beta and exists solely in the Netherlands, Belgium, and Norway, and is perhaps the most Digg-like service we've seen yet. While Kirkpatrick looks at these sites from a monetization and vertical integration perspective, what interested me more is how these sites seem to be on track to victory in the social media space even without having to fight with Digg for a user base.

The sites are seeing a fair amount of traffic, approaching a total of 1 million visitors per month after two months in beta.

Microsoft, of course, manages this through localization. While Digg's readers come predominantly from the following countries:

digg countires

Microsoft is marketing its MSN Reporter service for three relatively obscure markets where Digg doesn't have any following to speak of. By offering almost identical functionality, and focusing on localization, MSN can appeal to these particular audiences in a way that Digg isn't doing yet.

The following speaks volumes about Microsoft's success with this strategy:

So far there has been considerable interest in the new service, with reportedly 500,000 and 800,000 users visiting the site in the 1st and 2nd months respectively. With articles getting up to 10,000 votes and 1,000 comments, this is a on a completely different level to most existing social news sites.

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Reader Comments (11)

mad4, February 22, 2007

It will be interesting to see the traffic these sites would send.

Andrew Ferguson, February 22, 2007

The localization strategy is a pretty good one. Particularly since they are beginning in, as you said, markets that are untapped by Digg.

The problem in that situation is that MSN Reporter is now in a situation where their most direct competitors are non-internet businesses. More specifically, the local newspaper and television stations for each country.

Whether enough people can transition to the web for local news remains to be seen.

The majority of content on Digg being tech, almost none of it requires any localization in order to be relevant. People seeking the latest in tech news will probably still go elsewhere to avoid being bogged down in all the local news stories on MSN Reporter.

Personally, this tends to be how I operate. I am extraordinarily ignorant on affairs in my municipal and provincial area, but I know of developments in the specfic fields I'm interested in within hours of them happening usually.

I'm really curious to see how this works out.

Doug Bromley, February 22, 2007

I'm all for localisation. The US political crap that constantly comes up on Diggs front page is tedious. Its incredibly US-centric when you view it as a non-US citizen.

Hans, February 22, 2007

I'm sorry, but for someone who uses Digg, its certainly no competitor (and I'm not even much of a Digg fan myself). Very poor production values.

Charles, February 22, 2007

Andrew - The 'tech' centric Digg audience is a very interesting one. While they do run the risk of driving this local content away, I wonder if they are crucial to cultivating a large scale online community. After all, the 'tech' audience crowd are the primary creators/consumers of online information. Their blogs are the ones most likely to have a 'digg this' button (which, I'm assuming, probably helps your content's popularity significantly).

My hope is that as these communities move past their infancy in the online space, they'll be more accessible, and start to round out the content.

Then again, if Digg released a 'local' category (alongside 'Technology' 'Science' 'Sports' etc.), it seems like their user base would render them unbeatable as a 'social' local news provider...

Lazlow, February 23, 2007

I prefer Digg but it's getting to repetitive and controlling. A lot of stuff appearing on Digg made it months or years ago, and now that all these new users are joining they're taking those same sites and redigging them again and again. I mean its fine that new people are joining, but I hate seeing the same site over and over and over again just because there are some new diggers.

kelvin newman, February 23, 2007

I wouldn't call them obscure markets! Seriously though msn's strategy makes sense. While I'm impressed as everyone with the success of digg but their audience is limited by the community. I think they is a place for a mass market non techy version of digg.

johnb, February 23, 2007

This is the best microsoft can come up with? They have some of the best computer minds in the world. They plagiarize a successful company model, pursue a small user base in three small countries. I understand that they cant compete against digg in the US. As they say on digg this story is buried.

Bill Seitz, February 23, 2007

As bizarre at it sounds to this crowd, Digg is a feature probably most effectively deployed via a big Portal player with big existing membership. E.g. MSN, Yahoo, and I suppose Google.

They can start by putting pseudoDigg links in the new stories and RSS feed entries they already deliver via their portals.

Then the question is: what do the online publishers do? 1 ignore all digg-like services 2 pick 1 digg-like service to "partner" with (and try and get paid per click maybe) 3 pick 1-3 digg-like services for simple open back-and-forth options 4 link to every possible digg-like service

I think 2/3 are the more likely behaviors...

Bill Seitz, February 23, 2007

So of course the end-game is for Digg to be bought by Yahoo. Duh.

Andrew Ferguson, February 27, 2007

@Doug: Yeah, 95% of the US Politics stuff on Digg is completely irrelevant to me as a Canadian.

@Charles: I definitely agree with you that the tech crowd is the most plugged in to these services. However, I also think it's only a matter of time before the more 'mainstream' and traditional content providers get on the game. Might as well be prepared so you can't be undermined.