So, the big social media story floating around is the problems people are having with Digg. I will admit that I am not an avid Digg user but that is because of some of the same reasons as described in the linked articles. By now people have heard of several “popular” sites being banned by the Digg gods. One site that I frequent is Copyblogger. They explain their issue with the “bury brigade”. I would not have a problem if this was an isolated incident. There are others having similar problems. The most recent is the rash of people talking about being banned from Digg. Some of these sites may be slightly NSFW (not safe for work), but that never bothered Digg before. Now respectable sites like Lesbiatopia are being banned because they may link to someone who is a little too liberal (Girl in Short Shorts)for Digg’s taste. Other users having problems are very high profile like Greg Davies at The TrukStop. Again, this is a problem because of the high profile some of these Diggers have.

The bad press is interesting in its timing as well. There are many rumors of Digg being for sale. Of course, people are now commenting on why Digg is not a good investment. The problems and potential sale are a big distraction for Digg at a bad time. Newcomer mixx.com has been getting a ton of positive press lately. Several of the high profile refugees from Digg are moving over to Mixx. There are even some minor rumblings of a Digg rebellion.

Why is this happening and why now? I think the now question is obvious. There has been a lot of news in the social media industry with the launch of Mixx, Reddit launching new sub-reddits, and Netscape/Propeller being spun-off/launched or whatever all in the past few months. So, there are some alternatives out there for unhappy users. The why is much more interesting. I am active on Mixx and can understand the “building an identity” idea. That is what being a submitter on the social media sites is about. The problem Digg seems to be having is that there are just too many people on the site for the top diggers to continue being top diggers. According to compete.com, Digg has seen a 160% increase in traffic over the past year. That is a very nice growth rate for an internet site. However, they went from 6.8 million visitors per month to 17.7 million visitors per month. Given that many sites seem to hit the mainstream at 10 million users, this is a very important trend. Digg was initially a very technical community. At almost 18 million users, they are going mainstream, and the mainstream does not care as much about the benefits of Wicket or Struts. This will obviously cause some alienation within the early adopters, as they have spent a lot of time “building their identity”.

Now, is Digg a good investment? For the right company, it is an amazing investment. You have 18 million visitors per month, with a lot of people culling interesting content from sites all over the web. This sounds like a great idea for an old media company to jump into social media for a “reasonable price” of the rumored $300 million. If Digg grows by 50% over the next year, that would mean almost 27 million monthly visitors. This is very close to the current Facebook visitation rate. We have all heard the valuation stories of Facebook by now and MySpace was bought for $580 million for even less users, so $300 million doesn’t sound that bad. Also, think of the information you would own with the submission and voting histories. Who should buy Digg? Hmm… the New York Times recently opened their site up for free and this would be a huge advertising opportunity for them. Time Warner and Turner Entertainment are my favorite choices. They would get a property that Rupert Murdoch and News Corp probably want and they could get it for a relative steal.

What do you think? Am I crazy? Did I stumble onto a decent idea? Or would you just like to call me a moron? Let me know in the comments.