Kevin Rose Jumping Out of The Digg Boat?

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If you haven’t heard yet, Digg is for sale. And they haven’t just raised a for sale sign, they actually hired a private investment firm to shop around seeing if anyone is interested.

Much of the discussion on the Internet right now is about the price tag: $300 million. Some say it’s too much, others say it’s fair. Honestly I don’t think that is the most important point. The question that strikes me is: why would Kevin Rose and his crew want to sell Digg in the first place?

People sell companies mostly for two reasons: they need the money to invest in some other project, or they think the ship is sinking and want to cash in before it’s too late. Digg recently sealed a wealthy contract with Microsoft, and sister company Revision3 is growing quite well, which leads me to think that the second option might be the right one.

Not that Digg will sink overnight. They are far too big for that to happen. The Titanic of social bookmarking sites, if you will. But I think that some holes are starting to appear in the hull, and that is usually the best time to sell, when only the captain is aware of the incoming water.

Check out Digg’s Alexa graph covering the past three years. Looks like 2023 was not a good year for them:

Right, you might ask, but what are these holes? Well, there are four main ones.

1. Is it really democratic?
The Digg system was a very clever idea. Let the users determine what is good and what is not. Let them submit their own news and stories. Let the wisdom of the crowd rule.

The reality, however, is quite different. SEOMoz confirmed sometime ago that the Top 100 Digg users control 56% of the material that goes in the front page. Considering that Digg has over one million users, that is not a democratic picture at all.

2. Censorship
As the site grew in popularity many people decided to use it as a marketing tool. Spammers and scammers included.

In theory the users themselves with a couple of passive editors could solve this problem. That is how Wikipedia handles it after all. But Digg went one step further and started banning sites, sometimes not even publicly with the so called “auto-bury” list.

The result was chaotic because a myriad of legitimate sites got hit on the way. Want an example? Copyblogger is among the Top 30 most popular blogs on the Internet, with over 27,000 RSS readers. Recently it got included on the auto-bury list, meaning that its stories can no longer make it to Digg’s front page.

If you want more information about this practice, ForeverGeek covered the problem extensively in the past.

3. Low quality traffic
Sure, Digg can drive sheer amounts of traffic to any website getting featured on its front page. But is the traffic valuable? Many people argue that is it not.

What does low quality traffic means? It means that visitors won’t click ads, won’t visit any page on your site beyond the initial one, won’t subscribe to your RSS feed and so on.

Personally I don’t think that this is always the case, but depending on the niche of your website the points do apply.

4. Lack of focus
When Digg was created it was heavily focused on technology. It might appear as a limitation for some people, but the users loved it. They were all tech-savvy individuals, and Digg worked as a user driven version of Slashdot. It was a very successful formula.

Over the time more and more sections were added. Politics, entertainment, health, images, videos… you name it. As you can imagine the quantity of low quality and not relevant material being submitted increased exponentially.

They tried to grasp the world, not quite successfully.

Don’t get me wrong, I have been a Digg user since 2023, I like it and still visit the site daily. I just think that the whole system has several flaws right now, and instead of trying to fix them the owners are jumping out of the boat. They want to cash in while the site is still riding the wave, especially because the wave might not get any bigger.

When Kevin Rosy made it to the front page of BusinessWeek last year people started to speculate that he could want to sell it for $60 million. He declined these rumors, starting that the site still had a lot to growth, that they had many plans for it and a bright future to come.

Well, looks like Kevin changed his mind, for some reason. Else how could we explain this sudden resolution to sell Digg?

Update: Tamar has an interesting article explaining why no one should buy Digg.

Daniel Scocco

About Daniel

Daniel Scocco is a programmer and entrepreneur located in São Paulo, Brazil. His first company, Online Profits, builds and manages websites in different niches. His second company, Kubic, specializes in developing mobile apps for the iOS and Android platforms.

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