The Best Bargain in Web 2.0 May be Available Shortly: Digg’s Shell

Digg Grave

Rumors and speculation are often a bad thing in social media, particularly for sites like Digg that have shown the resilience to continue to fight back despite rumors for years of their demise. Today’s batch of rumors hit a little closer to home for many users, but they also open the doors for a future consideration.

Can someone finally buy the shell of Digg and turn it into something great again?

The rumors are that The Washinton Post Company is engaged in a talent acquisition from Digg to get the services of their news aggregation and advertising team. The two things that Digg has done relatively-well over the last year is filter the content through a complex algorithm and generate revenue through an inline ad system that presents tremendous value to both the advertisers and the host site. In Digg’s case, they had all of the ingredients other than the traffic that once owned.

Their advertising model is next to perfect. By mixing in buzz-style content within the stream of the various aggregation points on the site, they were able to get an exceptionally high click-thru rate and expose companies to a different type of consumer. This wasn’t the standard “SALE SALE SALE” style banner advertising that many are used to. It was interesting content in and of itself.

Digg Advertising

The Problems

Again, the problem wasn’t the model nor was it the content (though that was a big problem after their disastrous decision to launch Digg V4 in mid-2010). The problem was the traffic. There were two things working against them. First, they were not willing to make aggressive moves to improve site engagement or exposure. Second, they fell prey to the Facebook carrot and started chasing around traffic from the biggest social site in the world rather than generating their own.

The result: an influx in offshore “spammer” style traffic that did not work well with the western cultural format that Digg holds to. In short, the traffic was very low quality, making sales a challenge at times but more importantly making them lose relevance in the eyes of the tastemakers.

Sites like Mashable, Techcrunch, Techmeme, and the Gawker network that used to hang on the sleeve of co-founder Kevin Rose found themselves disinterested in what was happening to the site a few months after the V4 launch. Instead of being at the top of mind, they lost relevance and did nothing to try to recapture it. Their moves in early and mid 2011 were timid and uninspiring. The result is what we’re seeing today.

The Hope: Refilling the Shell

The brand is still strong. The site still gets millions of visitors and stories that are promoted to the front page can still receive thousands of referrals from Digg. If the rumors are true and WaPo is only taking the technical talent, an ambitious acquisition of the shell and company itself is in order.

I personally hope this is the case. I would love to run the site myself as I feel that it still has the potential for a tremendous rebound. The question is whether or not anyone is willing to fork out the $2-$5 million it would take to get a hold of the assets and put in a team that knows how to make it work.

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JD Rucker

+JD Rucker is Editor at Soshable, a Social Media Marketing Blog. He is a Christian, a husband, a father, and founder of Dealer Authority. He drinks a lot of coffee, usually in the form of a 5-shot espresso over ice. Find him on Twitter, Facebook, and Pinterest.

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