digglogo012908.pngToday, social news site Digg announced it was joining the DataPortability Project, the latest in a string of big companies to join, including Facebook (our coverage), Google, Yahoo, Microsoft and others. The project is a workgroup, where engineers from these companies discuss ways to let a user on any of their respective sites export their own data, and share it with the other sites.

Here’s an example of how this could work. The New York Times could create a full-fledged social network, where New York Times articles you submitted, voted for or commented on at Digg could appear next to your NYT social network profile.

But that’s just one potential scenario. The jury is still out as to whether this workgroup will be able to accomplish its goal, as user data can be valuable intellectual property for a company that it might want to not share.

The most obvious ramification could be that you would be able to transfer all of your contacts from Digg to other social networks. Like AIM, Gmail, Yahoo and other sites offer already, this means you could see, for example, who among your Facebook or Myspace friends is also a Digg user. If you see your friends using Digg, maybe you’d be more likely to.

But, the real impact could come from the following line in Digg’s announcement: “Want to use your Digg activity to get recommendations from another web site? We’re working on that, too.”

This sounds like a form of targeted advertising. Imagine a Digg user, say someone who submitted, voted and commented on stories in Digg about Apple and Linux products, getting served ads about Apple and Linux on other sites.

Some more context: Digg is reportedly growing fast, with 2.7 million users today, up from the one million it claimed to have hit less than a year ago. The San Francisco company is also for sale (our coverage).

By allowing third-party developers to more easily incorporate Digg user data in other sites, valuable new uses of Digg data could emerge — maybe a way to see the most “dugg” photos on photo site Flickr or the most “dugg” videos on YouTube.

Messaging service Twitter is a good example of a site that gives other sites free access to its users’ messages. This has led other services to incorporate Twitter, and this in turn sends more users back to it. Digg’s portability effort, in turn, could make Digg a more integral part of the social networking community, and so more valuable to an acquirer.

If nothing else, this alignment with DataPortablitity should help the perception of Digg among some of its own users. You’ll remember that just six days ago some of the site’s top users were on the verge of revolt amid controversy over algorithm changes and the lack of transparency in some of the site’s actions (our coverage). It took personal intervention from Digg chief executive Jay Adelson and founder Kevin Rose to quell the rebellion, but they were only able to do so with promises that they would work to make the community more in tuned to its users’ desires. DataPortability is nothing if not a big badge of apparent openness.

MG Siegler blogs on technology and new media at ParisLemon.com.

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