This research applies Socio-Cultural theory and Distributed Cognition/Activity theory to conceptualize the design of collaborative learning activities in large shared digital spaces. The paper begins by providing a summary of previous work in the creation of a technology platform for large shared digital spaces. It then details how Socio-Cultural theory and Distributed Cognition/Activity theory can provide significant insights into the educational utility of such collaborative technology and how design issues relating to collaborative learning may be addressed. The paper then reports on an experimental study involving a Phonics literacy application, including data from a survey of 19 participants and focus groups sessions by 6 discipline experts. Themes related to Socio-Cultural theory and Distributed Cognition/Activity theory are highlighted in the results reported. Conclusions and further research opportunities involving large shared digital learning spaces are then discussed. (Contains 9 figures.) [Funding for this research was provided by the eEducation Centre, the Berwick Campus and the Faculty of Information Technology at Monash University. For the complete proceedings, "EdMedia 2012: World Conference on Educational Multimedia, Hypermedia and Telecommunications. Proceedings (Denver, Colorado, June 26-29, 2012)," see ED539862.]