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di RICCARDO BAGNATO

(15:42 07/03/2008)

There are a number of ways to be mislead by the title, so make sure you read the first bit of this before you move on to the next story, because this is a big one. Google is going to allow folks in the AdWords program to not just bid for online ad placement, but for placement of commercials on TV (otherwise known as Old Tee Vee or Old Media or that boob tube in your living room).

This follows news from a year ago, when Google started selling radio ads through the program, and in July, when Google started selling print ads. The programs, at least from the online marketers I’ve spoken with, have received very mixed reviews. Almost universally, they think that it’s a cool and unique opportunity, but especially in the case of the radio ads, the plays they bought usually played at very off-hours and didn’t result in a favorable ROI for the price.

In an effort to combat that, Google appears to have put serious effort into making the TV ad buys a robust and stats-rich experience.

Pinny Cohen today wrote about his invitation to the TV Ads Beta program, which allows users to upload 15, 30, 45, or 60 second TV ads. The system is designed to let you see how many impressions were shown, bid on a CPM for those impressions, and schedule your advertisements by locality and time.

There also appears to be some focus-group style ratings of them, as well, that shows how long viewers watched the ad on average, and at what point the advertisement lost most viewers.

Pinny expects to see a lot more spam on TV, as a result, as well as a lot more UGC-style inexperienced advertisements showing up that show rookie mistakes and faux pas. I’m somewhat more skeptical. On the one hand, there seems to be a lot of thought put into this service above and beyond what was put into print and radio. On the other, there hasn’t been a great deal of positive response from the folks I’ve heard have used those services - and that’s a decent indicator that this won’t be a rousing success either.

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User-generated news site Digg has been working with influential investment bank Allen & Co. (the ones that recently got Slide a half billion dollar valuation) for a few months now, and pitching big tech and media companies on a sale.

And despite a number of false starts, this time a sale looks likely, and soon. We hear from a source very close to the deal that four companies are in heavy due diligence with Digg - two media/news companies, and two big Internet companies - Google and Microsoft. And Google and Microsoft are on the verge of making their bids.

Digg is prepared to take less than the $300 million Allen & Co. were floating late last year. Google, our source says, will likely bid $200-$225 million, which Digg would likely accept.

Microsoft is looking at a somewhat lower price. That makes sense, since most of Digg’s revenue today comes from a three year advertising deal that Digg signed with Microsoft last year. That deal has revenue guarantees - and Microsoft may be hesitant to value Digg based on revenue that they supply.

Any sale is likely to give Microsoft an option to terminate that advertising deal, which means Google isn’t valuing Digg based on revenue, either. But it is a big slap in the face to Microsoft to steal Digg away, and Google can certainly generate revenue on all those page views.

More as this develops, but we may be looking at a bidding war between Microsoft and Google over Digg. Plus any late comers to the table.

Digg was founded in late 2005 and has raised $11.3 million in funding.

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