Why digg failed

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As it turned out, power users like Lopez earned their influence by picking good stories. Without them, the editorial mix suffered, but perhaps more importantly, the community faltered. For every Miguel Lopez, there were thousands of Digg-contributors aspiring to achieve his level of influence.

And there were thousands upon thousands more who came to trust Lopez as a curator, and who read Digg to read Lopez. By suddenly normalizing its power users, Digg upended the entire dynamic of its community. It did so in service of some stale social media ideology that has never proved particularly practical: namely, the idea of a system without elites.

Reputation economies like Digg thrive on elitism. But for every thousand visitors, Digg would be lucky if 10 submitted stories. Those 10 are different from the other They have the time, the ability and the desire to contribute, and not simply consume.

By the end of , two years after launching, Digg was claiming 20 million visitors a month and close to one million registered members. Acquisition rumors continued to run rampant as well.

News Corp. Yet again, the founders refused. Instead, they went on to raise another round of funding Series B in December They used that cash to make some fundamental changes to the system. Given their vast follower counts, upvotes of those users often held much bigger weight. Unfortunately, peace would only last for a few weeks. A non-apologetic by CEO Adelson only added more fuel to the fire.

Then, in July, it made waves by ditching Google, its previous advertising partner, for Microsoft. Digg also unveiled the Digg Button, one of its biggest growth engines in retrospective, to the public. The button allowed users to dig stories on other publications, which in turn would be upvoted on its platform.

Right after launch, it managed to secure partnerships with The New York Times and Wall Street Journal, which indicated the significance Digg had managed to amass. It even managed to partner with CBS News for its online coverage of the presidential election. In January , it introduced a new algorithm whose intention was to prevent users from gaming its ranking system. The update effectively punished people who voted in groups to endorse certain topics.

After a couple of hours of debate, founders Adelson and Rose popped into their call and talked them down from boycotting the site. During the summer months of , yet another acquisition rumor began popping up. Months prior, the search giant had even introduced a Digg-like voting system into each own search results. Instead, Digg yet again raised a round of funding. The capital injection was very much necessary as advertising spend had dried up as a result of the financial depression.

At the time, Digg had around 75 people on its payroll. As such, its server cost had risen as well while advertising spend largely flatlined.

That sentiment was in line with a Business Week article published in December Therefore, Digg decided to abandon its advertising deal with Microsoft in April and rely heavily on its own internal sales force to market available ad space on its platform.

Microsoft would then get the remnant inventory, i. Those ads went live in August However, the latter also stirred up some new controversy yet again. While it did lead to greater page view numbers, it also felt like a sneaky way of keeping users on the platform. At the time, Digg had around 40 million monthly visitors and 80 employees in total.

Unfortunately, not everything was always going according to plan. Allegedly, co-founder Rose and the board grew increasingly frustrated with how long it took Adelson to ship version four of Digg. A day after he became CEO, Rose announced that they would remove the Digg Bar, a move that was generally well-received. A month after, in May, Digg announced that it had to reduce staff by about 10 percent, which also included its CFO among other key executives. Yet, the biggest problem was yet to come.

Just days before Digg announced its new CEO hire Matt Williams, who had spent the past decade in key roles at Amazon , Digg unveiled version four of its platform after a year of working on it. Unfortunately, die-hard users hated it right out of the gate. Digg made a lot of significant changes, including changing the location of its sub-categories, making it tougher to follow friends, changing the design of the commenting section, and many more. To make matters worse, the new version of Digg was also favoring publishers over actual human users by allowing them to auto-submit content.

Soon after its launch, all of its categories were littered with stories that those very same publishers wanted to see getting exposure. All of this controversy essentially led to a mass exodus of users to competing platforms. Digg had already struggled to keep up with the rising relevance of Facebook and Twitter.

CEO Williams had to try and find a way to correct the monumental mistake they made. In mid-October , he announced that Digg would bring back many of the beloved features of version three. Nevertheless, the damage had already been done.

As a result of the user exodus, Digg had to lay off 25 of its 67 staffers, including Chief Revenue Officer Chas Edwards who had been with the company for nearly five years. Additionally, news surfaced that Digg was gaming its own system, ostensibly to favor certain partners. The company had allegedly used fake accounts to upvote certain stories.

While Digg came out and said these accounts were only used for testing purposes, the damage had already been done. By February , Reddit had managed to take over Digg in terms of traffic numbers.

A month later, Rose announced his resignation from Digg. Days prior, reports had emerged that showed him not using his own Digg account for weeks or months at a time. In August, Digg had managed to completely restore version three.