Correction:

A previous version of this article incorrectly stated the name of The Washington Post’s daily deal service. The correct name is The Capital Deal.

SocialCode hires 15 employees from Digg.com

SocialCode, a social media advertising firm and subsidiary of The Washington Post Co., has hired 15 members of the engineering team from the social news site Digg.

In an interview, SocialCode chief executive Laura O’Shaughnessy said the engineers will be working on products that compile and analyze data from social networks to help companies glean more information about their customers. (O’Shaughnessy is the daughter of Post Chairman Donald E. Graham.)

“The research team can use methods to actually collect data through Facebook and Twitter that’s publicly available,” she said. “There’s an enormous amount of data about trends in all of these social networks.”

Digg was once one of SiliconValley’s most promising start-ups. But the service, which allows readers to vote on Web content and displays the most popular news, has declined in recent years as users have turned to services such as Reddit or Twitter to share content with their friends. In 2010, the company cut its staff from 67 employees to 42. In March 2011, the service’s founder, Kevin Rose, left the company. He now works for Google.

There’s been speculation in the technology press for weeks that the team from Digg would be joining The Washington Post Co.’s WaPo Labs. That division produces products such as Trove and the Social Reader app, which took off after its launch but has had a decline in users over the past month.

Digg chief executive Matt Williams wrote in a blog post Thursday morning that the San Francisco-based company has been more focused on advertising in the past few years — expertise that could augment The Post’s efforts to find new ways to advertise as revenue from traditional channels continues to fall. Beyond Social Reader, the company has expanded into products such as Service Alley and The Capitol Deal and targeted publications such as Capital Business.

The opportunity to focus more closely on social media is important for the Washington Post Co., said Motley Fool technology analyst Andrew Tonner. “Advertising over social media is a huge opportunity,” he said. “Strategically, it seems like a big win for The Washington Post.”

SocialCode, which was launched in January 2011, did not acquire the Digg.com domain, service or technology. But members of Digg’s leadership team will be taking lead roles at SocialCode. Alan Lippman, who had been Social Reader’s vice president of advertising products, will be the chief scientist at SocialCode. Will Larson, a software developer at Digg, will serve as SocialCode’s director of engineering.

Ladd will lead a team of mathematicians and statisticians who will gather the most information possible from the publicly available data, O’Shaughnessy said.

She declined to say how much it cost to hire the engineers from Digg. Digg did not respond to a request for comment on the hiring.

The new engineers will work from San Francisco and Seattle with SocialCode’s teams in Washington, New York , Portland, Ore., and Los Angeles.

 
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