There are a few lessons to be learned regarding the 500k purchase of Digg.Com last night.
The Wall Street Journal reported:
“Digg Inc., a social-media pioneer once valued at more than $160 million, is selling for the deeply discounted price of about $500,000, three people familiar with the matter said.
The buyer is New York technology development firm Betaworks, which is attempting to revive a news-sharing site that was outmaneuvered by Facebook Inc.and Twitter Inc.”
Clearly the Wall Street Journal didn’t fully comprehend why Digg Died… the problem wasn’t Facebook or Twitter… or even Reddit (if the Journal wanted to point fingers to an external source, it should have been Reddit, not Facebook and Twitter).
But the Wall Street Journal was looking for an external source to cite the article, in fact the problem wasn’t an external source. It was Digg itself.
Back in 2006 Digg was the definition of popular site. Everyone wanted to see their content reach the main page of the site. The traffic was enormous…. and yes advertising agencies were paid to get content up on page 1 of digg. I know I was paid for it as well as ALMOST every other power digger.
But somewhere along the line Digg lost their way… Everything from a disaster V4 “upgrade” to the site, to the HD-DVD encryption key fiasco but the problem started well before that.
In fact it started right after Digg signed an advertising relationship with Microsoft. Immediately afterwards several things started to happen. For example Digg banned the popular forum SqlSpace.Com for hosting a screenshot of Ubuntu being the featured product on Windows Marketplace. This was actually the beginning of the end.
When Microsoft started exerting editorial control over Digg and they did until late 2009 people started to leave the site in droves.
Faced with declining viewers, Digg attempted several redesigns, each worse than the previous one from an end user experience. Digg Version 4 was the worst… the frame/toolbar almost upset as many people as the auto-submissions. Links weren’t great from an SEO standpoint with new design leaving publishers with very little reason to submit content. And even if you did submit content you were faced with auto-submission competition from big sites… it was one disaster to another for the site.
Large numbers of Digg users voiced their concerns to Digg but were met for the most part with Silence…. in other words Digg refused to listen to their customers. Users were faced with a main page that was almost identical to Google News due to the full stream of autosubmissions and very little if any individual content (the reason people went to Digg in the first place) made it to the main page.
Around early 2010 websites like “I Hate Men” started to exceed the traffic level that Digg received. I Hate Men is nothing more than a male bashing site by angry females… by this time it was well known in social circles that digg was dead.
This is a shame, because Digg had so much potential…. But to the root of the story, Wall Street Journal you were wrong to say that Facebook and Twitter “outmaneuvered” Digg… the reason Digg failed wasn’t because of any outmaneuvering… it failed because Digg never listened to their customers…. what business would survive today without listening to their clients? Digg Dug it’s own grave.
ADDED:
Now there’s some dispute regarding if it was sold for $500,000 or if people should count the employees that were bought off earlier in that figure, regardless both figures $16 million or $500,000 are both way below the 65 million that was invested in Digg, making the argument moot and are both WELL below the nearly $200,000,000 that Digg was valued at during it’s peak.