It was announced by Microsoft that Digg.com will not use Google Advertisement and instead will use Microsoft Advertisement.

Microsoft Corp. announced online advertising deals Wednesday with Digg.com and video-game publisher Electronic Arts, seeking to further establish itself in an area of the tech industry dominated by its rivals.

The agreements came in advance of Microsoft’s annual conference with financial analysts Thursday in Redmond — where one of the company’s challenges will be convincing analysts that it can come from behind in online search and advertising.

Microsoft will replace Google’s ad system on the Digg site. Google, the Internet search leader, posted $3.8 billion in online ad revenue last quarter — seven times more than Microsoft.

The Digg deal will make Microsoft the exclusive provider of display advertising and contextual ads, determined by the contents of the site. It’s similar to an advertising agreement Microsoft struck with social networking site Facebook last year.

Microsoft declined to disclose the financial terms of the Digg deal, but the agreement gives it another high-profile partner in its online ad initiatives.

Digg, which says it attracts more than 17 million unique visitors a month, prioritizes the placement of stories and other content based on user votes, or “diggs,” as it calls them.

Apart from the added revenue, Microsoft says it believes the association with Digg also will help Microsoft improve its approach to advertising.

“One of the most exciting parts about this deal is that we get to sit in a conference room with these guys every now and then and brainstorm about how to do a better job of that,” said Adam Sohn, director in Microsoft’s Online Services Group.

Digg is expected to continue working with Federated Media on sponsorships and specialized advertising campaigns.

“This move gives us an advertising partner with a larger organization and a more scalable technology platform to keep pace with Digg’s growth,” wrote Digg founder Kevin Rose in a blog post about the agreement.

Separately, Microsoft announced Wednesday that its Massive in-game advertising subsidiary has struck a deal to put advertisements into five upcoming Electronic Arts games, including “Madden NFL 08″ and “Tiger Woods PGA Tour 08,” for Xbox 360 and Windows PCs. These are the kinds of ads that can be updated and changed using the online connection.

It’s not the first EA deal for Massive. The companies started with “Need for Speed Carbon” and later added “Def Jam: Icon.”

Will this affect the Adsense Earner? Will the advertiser will tend to shift from Adsense to Microsoft , and This I do not know. Well we will see the effect of this news may after 1 month or two.