• by Gavin O'Malley  @mp_gavin, May 10, 2012

SocialCode, The Washington Post Co.’s social media ad firm, has confirmed hiring away 15 top engineers from social news site Digg. Joining SocialCode’s developer team in leadership roles will be Alan Lippman -- formerly Digg’s VP of ad products -- as chief scientist, and Will Larson as director of engineering.

“This agreement marks the first of many planned moves,” Laura O’Shaughnessy, CEO of SocialCode, said Thursday. SocialCode helps brands and agencies understand and exploit social media platforms -- expertise that The Washington Post Co. itself needs.

Indeed, recent findings from AppData.com revealed that the Washington Post’s Social Reader -- an app that encourages Facebook users to read and recommend stories from the Post’s Web site -- is losing steam. Over the past month, the app’s monthly average users (MAU) fell from 17.4 million to 9.2 million. Officially, WaPo’s Social Reader app is operated by the Washington Post Co.’s WaPo Labs, and is separate from SocialCode and its advertising capabilities. 

To complicate matters, The Washington Post Co. is coming off a bad first quarter, during which its new media division failed to offset its old media losses  First-quarter revenue generated by the company’s newspaper online publishing activities -- primarily WashingtonPost.com and Slate -- decreased 7% annually to $24.2 million. In particular, display-advertising revenue declined 11% year-over-year, while online classified ad revenue on washingtonpost.com fell by a single percentage point. 

Last week, an independent source told Online Media Daily that SocialCode was close to hiring Digg’s tech team. It was interested in Digg’s talent -- not the site’s technology -- because its tech group knows how to program custom graphs, and it has the knowledge to analyze the data.

The Washington Post Co.’s interest in Facebook is already well documented. Facebook CEO Mark Zuckerberg and Washington Post CEO Donald Graham have reportedly formed an unlikely relationship. Since 2009, Graham has served on Facebook's board.

For Digg, the loss is just the latest setback for the once high-flying social news reader. In 2010, Digg downsized its staff from 67 employees to 42, and in March 2011, founder Kevin Rose left the company. 

By contrast, Digg rival Reddit is doing better than ever. Earlier this year, the Condé Nast-owned social media service broke the billion monthly page-view barrier -- up 300% since early 2011.