Digg was hurting. Its employees were hurting. The bad news didn’t end there. Yesterday a bombshell exploded. In earlier time it would have immediately made the front page of Digg itself!
If you’re outside the techie world this might be a story you haven’t heard yet, but it’s huge. It concerns Digg a site that allows users to submit links to stories. How the rest of the community values those links decides whether they receive more or less prominence on Digg’s front and succeeding pages.
A front page hit on Digg (as had previously been the case with slashdot.org) could bring a website to its knees under a tsunami of traffic!
Digg was great for finding hidden gems and then giving them wide play. It was one of my first stops every morning then revisited as the day went on.
Digg grew with such ferocity Business Week featured a front page article on the site and its founder Kevin Rose. They claimed Rose’s stake in Digg was worth $60,000,000. Not bad for a site started 18 months earlier with an idea and a few hundred dollars.
As with most websites Digg has evolved over time. The Business Week article came around version 3.0. Recently Digg has gone to version 4.0 and that’s when the wheels began to fall off the bus!
Along with a new look came a new lineup of stories on the front page. Major websites were getting more prominence pushing the smaller more eclectic sites Digg was known for spotlighting aside. Stories were getting play that would have never been dug by diggers before. Rumors began to fly Digg’s traffic was rapidly dying as users became disaffected.
Yesterday Digg slashed its staff. Here’s how Information Week reported it.
Digg gave pink slips to 25 of its 67 employees, reducing its workforce to 42 people, said former Amazon executive Matt Williams, who joined Digg as CEO about six weeks ago, in a letter to staff.
“We must significantly cut our expenses to achieve profitability in 2011. We’ve considered all of the possible options for reduction, from salaries to fixed costs,” he said. “It’s been an incredibly tough decision. I wish it weren’t necessary. However, I know it’s the right choice for Digg’s future success as a business.”
Digg was hurting. Its employees were hurting. The bad news didn’t end there. Yesterday a bombshell exploded. It was a story that in earlier times would have immediately made the front page of Digg itself!
Did Digg game its own system to benefit publisher partners?
The source was a Tumblr.com blog which laid out in meticulous detail how Digg first allowed large sites to submit their own links (instead of waiting for them to be submitted by users) then created automated dummy users to “dig” the stories onto the front page. The implication was money was changing hands to buy exposure on Digg.
The tech community is incensed and Digg which held an exalted place in that community is now reviled. Some are predicting the site will be unable to weather this storm of bad publicity. I have never seen opinion change this radically this quickly.
It’s rumored Kevin Rose turned down numerous earlier offers to sell Digg for eight figure amounts. Oops.