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Digg's story is a cautionary tale for other websites

Digg failure tied to designs and inability to keep up with changing Web

Financial trends and news by Steven Loeb
July 15, 2012 | Comments
Short URL: http://vator.tv/n/2860

Once a dominant news aggregator, Digg's reign has come to an end, and one that no one would have imagined when it was at the top of its game. One could say that Digg collapsed as the tectonic plates of news distribution from shifted beneath it. 

Earlier this week, the social bookmarking company announced that it would cease to exist. The site was being sold off, piece by piece, to different outlets, for around $16 million.

The Washington Post paid $12 million for the Digg team, while LinkedIn paid between $3.75 million and $4 million for one awarded patent, having to do with content visualization, as well as 15-20 pending patents. The domain, code, data and all of Digg’s traffic were sold to Betaworks for between $500k and $725k.

Digg will now be merging with News.me, who will be taking over management. News.me is a startup that was funded by Betaworks that makes iPhone and iPad apps. John Borthwick, founder of Betaworks, will be taking over as CEO of the new Digg.

Though the total price tag of $16 million is not a small amount of money, only four years ago Google reportedly offered to buy the company for $200 million, which the company turned down.

So how did such a popular site go so wrong so fast? Digg should be a cautionary tale of what happens when a website fails to keep up with the changing times and takes its audience for granted.

Brief history of Digg

While Digg was one of the first and most popular social media websites, it is important to note that it was not a social network as we know them now to be. It was not individualized, with personal pages, which is what most people would think of when it comes to social networking.

The site, founded in 2004 by Kevin Rose, allowed users to submit news stories in different categories, such as Technology, Science, World & Business, Videos, Entertainment and Gaming. Other users would then vote the story up or down, either “digging” or “burying” the story. 

The site was a pioneer for sharing on a big scale, Ezra Roizen, partner at Ackrell Capital, told VatorNews. The problem was that they were “in front of a bigger wave in the form of Facebook and Twitter.” Digg's distribution model was in the form of people voting to get a story to bubble to the top, which likely left many dissatisfied if their vote barely moved the needle on a story, Roizen explained. But sharing on Twitter and Facebook has relatively instant satisfication because the intent to share is just to share with one's network.

Mistakes

One of Digg’s biggest missteps, one that Rose admitted was a big mistake in a recent interview with the Wall Street Journal, was its attempted redesign in 2010, called Digg v4.

Released on August 25, 2010, Digg v4 removed several of Digg’s core features, including bury, favorites, friend submissions, upcoming pages, subcategories, videos and history search. It also contained numerous bugs and glitches, as well as an increased number of advertisements on the homepage.

The response from Digg users was dramatic. Not only was August 30, only five days after the redesign, declared by users to be "quit Digg day," but the site also saw traffic fall heavily in September, dropping around 34%, from 16 million monthly users to around 6 million, by the end of the month.

Drew Curtis, founder and CEO of Fark, a popular news aggregator, said that the redesign, essentially, pushed people too far. 

“They destroyed the existing site and replaced it with a completely different version, while insisting it was the same thing,” Curtis told VatorNews.

“Digg committed suicide.” 

According to Curtis, people at the company were against the total redesign of the site, and some of them even left in protest.

Though no names were mentioned, it should be noted that CEO Jay Adelson did leave the company only a few months before, in April 2010, with rumors that he had disagreed with the company board over what the redesign would look like.

By the time of the overhaul, Digg was already seeing heavy competition from Reddit, and users expressed their displeasure with Digg by heavily posting articles from Reddit.

August 2010 was a crucial month for the two sites. At the beginning of the month, Digg was besting Reddit in worldwide referral traffic 56% to 43%. After the debut of Digg v4, traffic for Digg fell from 42% to 13% in single day. By the end of the month, Reddit had 92% of referral traffic, compared to only 7% for Digg.

 

(Source: StatCounter Global Stats - Digg vs Reddit Market Share)

“We were desperately trying to figure out how to get traffic back,” Rose told the Wall Street Journal. “A bunch of the community had already revolted by the time we fixed it.”

The falloff was so sharp that in October 2010, the website announced that it would be laying off 37% of its workforce. 

Digg was never able to recover from the fiasco.

Bigger problems

The truth may be, though, that, bad redesign or not, Digg was perhaps always destined to fall by the wayside once sites like Facebook and Twitter started becoming more popular.

These sites highlighted sharing stories among friends, making the experience more social. Even more important than that, though, was the speed at which users could share, something Rose acknowledged was a major problem with his site, saying that it took eight separate steps to post a story on Digg, an eternity on the Internet. These other sites, in effect, left Digg behind.

“Twitter became a major place to find out what was breaking on the Internet,” Rose said. “Facebook became a place to share links. Social media really grew up.”

As Roizen pointed out earlier, sharing on Facebook and Twitter has an exponential distribution dynamic on stories vs. a more linear voting distribution model on Digg where fewer people were inclined to "dig" a story.

If Digg had taken steps toward making pages more personalized, like Pandora, or had allowed users to create their own channels with their own specific interests, like Pinterest does, then Digg may have been able to keep up.

While Roizen makes sure to note that he does not consider Digg to be a failure, he says that the problem was that “they did not realize the threat that Twitter was to their business.”

Another problem with Digg, according to Curtis, is that in an online community, everyone has to be there for a common purpose, to see something they care about. Unfortunately, news is not one of those things he said, pointing out that Reddit has had to move away from being a news aggregator and more toward “funny cat pictures.”

Digg, on the other hand, did not change and that may have doomed them.

The ultimate lesson from Digg

Curtis says the ultimate lesson for other companies, such as Facebook and Netflix is, “respect your audience.”

Instead of overreaching by trying to target Twitter, says Curtis, Digg should have kept doing what they were good at and they may have continued to grow, like Reddit did. Instead they were a top 10 website for years, and then suddenly they fell off.

People have a high tolerance for updates and changes, as witnessed by the many different things Facebook has done over the years, but “one of these days they are going to make a change and people will say ‘I’ve had enough.’”

To Roizen, the lesson should be for other websites to determine whether or not it may actually be best to be aquired, rather than going out on your own. 

Perhaps, he says, if Digg had been purchased by a company like Google, which would have made them part of a bigger platform, then they would have been able to survive. 

(Disclosure: Both Roizen and Curtis are investors in Vator.)

(Image source: mankabros.com)


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