Digg built a new way for Internet sharing, then fell into a hole it dug 

Digg is a pioneer of the social Internet. It was one of the first and best-known online news aggregation brands, a top-100 Internet site with 20 million unique monthly viewers. Its ubiquitous graphics inviting readers to “Digg” this content festoon millions of websites alongside Facebook’s “like” links and Twitter’s “tweet this” buttons.

But none of Digg’s original staff works there anymore. In December, founder Kevin Rose tweeted 26 times more often than he “dugg” something. In March, Digg announced that Rose had little involvement with it anymore.

The 7-year-old Potrero Hill company is struggling to retain its former relevance. Without a dramatic turnaround in the next few months, Digg could become just another burned-out star of the social Internet, joining a constellation that includes Friendster and MySpace.

An August redesign started a user revolt, and the social news site’s traffic plummeted to 50 percent of its 2008 peak. Digg cut its staff by 35 percent, and after spending $40 million in venture capital funding, the unprofitable private company recently reported that it would run out of cash by mid-2012 without further cost cuts.

As San Francisco considers tax breaks designed to keep companies such as Twitter and Zynga from fleeing their startup nests, the experience of Digg serves as a poignant lesson that consumer tastes are often fickle in the rough-and-tumble world of Web 2.0.

New Digg CEO Matt Williams said he can only wish that he had Twitter and Zynga’s problem with San Francisco’s taxes on stock options.

“We don’t have to worry much about that,” he said. Instead, Williams said he is aiming for “cost neutrality” this year while fending off what he calls premature announcements of Digg’s death.

Digg revolutionized how people think about information. Launched in 2004, it let users choose the top news by submitting a headline and link and voting it up, a “digg,” or down, a “bury.” Headlines with the most “diggs” made the front page.

“They were among the first social media sites to show how these emergent social networks could be used to compute relevant stories,” University of Southern California associate professor of computer science Kristina Lerman said.

Then, Digg added the ability for users to “friend” one another, creating an online popularity contest that anyone could join. Usage exploded. Power users would post links 16 hours per day.

The site soon was both loved and loathed for its ability to point millions of eyeballs toward top-linked news stories. Digg’s audience was courted by the likes of President Bill Clinton, former California Gov. Arnold Schwarzenegger and skater Tony Hawk.

But Facebook also started in 2004, and Twitter started in 2006. Soon, Digg’s content popularity contest was absorbed into the broader popularity contests of life on Twitter and Facebook, which incorporates sharing hot news links, along with personal pictures and digital effluvia.

“Places like Digg, Flickr and Del.icio.us suffer because they’re more special purpose,” Lerman said. “Lots of other social media sites are suffering the Facebook effect and the Twitter effect.”

Amid the recession in 2008 and 2009, Digg’s traffic peaked at around 40 million unique users per month. But coupled with a weak advertising market and Facebook and Twitter’s rapid rise, founder Kevin Rose drastically changed the site in August.

The all-important “TopNews” page was replaced by a custom “MyNews” page for each user. In an attempt to further monetize its enormous traffic, Digg made it easier for major brands to buy Diggs. The changes managed to break the site, removing its best-loved features and taking the game out of Digg.

The popularity contest was over, and power Diggers went nuclear. Lerman said Digg tried to become something it wasn’t and alienated its true fans. Digg’s automatic personalization, she said, “completely ignored the greatest recommendation engine they had: the influencers and the long tail.”

Free to join and free to leave, the hoard began defecting to ascendant Digg peer Reddit or elsewhere.

“Communities are really fickle,” said Alex Chang, founder of the San Francisco social marketing company Roost, which helps small businesses manage their Twitter and Facebook presences. “You have to tend to them very carefully. It’s not hard for me to switch to another news aggregator.”

New CEO Williams said the redesign was resounding proof Digg had lost touch.

“It would not have happened if users were front and center back then,” he said.

Williams left his job at Amazon.com on a Wednesday last summer and took over Digg on a Thursday.

“The very first day was walking into a triage situation of site outages and user revolt,” he said. “We had tried to do too much at once.”

He’s been in firefighting mode ever since. The site is again stable, and developers are slowly adding back Digg’s lost features such as its “bury” button and taking away loathed new features such as automated digging. Williams said traffic is up 20 percent since it bottomed out late last year. To-be-announced features will make Digg news more personal, Williams said.

“Digg is still the best place to find news you care about, and we’re inventing new ways to do that moving forward,” Williams said.

Lerman credits Digg with changing the Internet forever. But, going forward, that might not count for much.

“Whenever I’m teaching class, for the last two years I’ve asked, ‘Show me who here uses Facebook?’” she said. “The whole class raises their hand. ‘Digg?’ nobody says anything. I’m not really hopeful about its future.

“That happens with everything. Look at Friendster or Alta Vista or Lycos. The metabolism for the Internet, the rate of change itself, is increasing. Market fatigue sets in faster than ever.”

 

What hath Digg ‘dugg’?

Digg was one of the first sites to compute the relevance of news using a social network. It spawned the Web’s ubiquitous “Digg button.” Then other sites came along to cannibalize its traffic:

Facebook Like buttonFacebook’s ‘like’: This button takes the omnipresent site’s half a billion users and spreads their influence into the realm of journalism, where ‘like’ buttons now sit next to stories and reinforce their popularity or lack thereof.

Twitter tweet this buttonTwitter’s ‘tweet this’: Post a headline and link to a story on your Twitter page when clicking on the now-ubiquitous button. Tweeting has replaced Digging for many folks, including Digg founder Kevin Rose.

Google +1 buttonGoogle ‘+1’: Google tries to get back into social media with a “+1” button users can push to vote for content online. +1s will be used to compute search result relevance, and identify spammy content.

Stumbleupon buttonStumbleUpon: Submit a link to StumbleUpon, one of the Internet’s most popular distraction engines. StumpleUpon indexes unique, highly trafficked content for random Web viewing.

Fark buttonFark: Around since 1999, Fark has become one of the world’s largest and oldest repositories for news of the weird, including thousands of new ones per day. Fark is run profitably on a shoestring by 38-year-old Kentucky native Drew Curtis.

 

Reddit allows its users to poke around under the hood to assist in site’s growth

When Diggers bolted Digg in 2010, many of them flocked to Reddit.

Founded in 2005, the scrappy South of Market company is on a growth tear, almost doubling its traffic in six months, according to estimates by Quantcast.com. In March, rumors circulated that Reddit’s owners at CondeNast might spin it off for $200 million.

Reddit community manager Erik Martin wouldn’t comment on the rumors, but he said Reddit just crested 1 billion page views per month and has about 14 million unique visitors per month. Major advertisers are buying, and Reddit’s servers are red-hot and a bit unstable, responding to 1,500 requests per second from users who comment, request pages, upload media and vote content up or down.

While the site has the deliberately underdesigned look of Craigslist, under the hood hums pliable software that allows Reddit to offer the same experience to hardcore fans while becoming new things to new people.
“It started as a way to let Web users pick what the most important stories of the day were and it still does that,” Martin said. “But the area where it’s really grown, no one could have predicted.”

Unlike sites such as Facebook, Twitter or Digg, Reddit became fully open-source in 2008, which means that users can take its code and start their own Reddits. Those “sub-Reddits” can be linked back to the main Reddit web page, and today, more than a third of Reddit’s new content doesn’t link out to anything. It’s images, jokes, questions, stories and rants — a throwback to the days of bulletin boards and forums.

Reddit’s popular “IAMA” section — which stands for “I am a ______, ask me anything” — has drawn the likes of congressmen, “Jeopardy!” star Ken Jennings and the Google Chrome team. The sub-Reddit “Ask Science” section teems with nuclear physicists explaining radiation to those terrified by the events at Japan’s Fukushima Dai-ichi nuclear plant. Reddit’s “Secret Santa” project involved 17,000 people, 92 countries and more than half a million dollars in gifts and shipping. A 5,000-book Reddit book exchange is currently ongoing.

Keeping the hot site up and running is a constant challenge for the staff of under a dozen, which includes just one full-time developer. In March, the site crashed for six hours — an eon in Internet time. Reddit is hiring four more developers. By contrast, Digg employs about 10.

“We definitely punch above our weight,” Martin said.

As commerce replaces community online, Reddit manages to channel the ideals of an earlier, more communal Web, Martin said.

“We still believe in the Net and its potential to make the world a better place,” he said. “I’m smarter and have a better perspective about what’s going on because of Reddit. I’m just maybe not as productive at certain hours of the day.”

 

Digg vs. Reddit (Source: Alexa, Digg, Quantcast)

Digg Reddit
Current unique visitors each month 20 million 14 million
Previous monthly unique visitors 36 million-38 million (2009) 8 million (July 2010)
Estimated rank among top U.S. websites 86th 52nd

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