Digg is an American news aggregator website originally founded by Jay Adelson and Kevin Rose in 2004. After enjoying four years of dominance between 2006 and 2010, the platform was sold in 2012 for the paltry sum of $500,000.
Digg’s decline began with the emergence of competitors such as Twitter, Reddit, and Facebook, with the latter’s Like button an instant hit with site owners. A complete site revamp in 2010 also alienated users who were not consulted before many popular features were removed.
Digg’s reputation as a democratic social news site was tarnished by power users who used their followings to influence the articles appearing on the Digg home page. As the ailing platform struggled to make a profit, the home page was further corrupted by sponsored placements. The platform still exists today with many of its original features reinstated.
Origin Story
Digg is an American news aggregator founded by Jay Adelson and Kevin Rose in 2004.
Digg was once an extremely successful social platform that disrupted the news industry with a curated front page of popular and shareable web content.
Users could vote such content up or down, which Digg called digging and burying respectively.
The Digg button, which allowed users to submit a site to Digg, suddenly had competition.
The Facebook Like button was launched in April 2010 and could be found on 350,000 sites just five months later.
Around the same time, Digg had to deal with the rapid emergence of social news sites Reddit and, to a lesser extent, Twitter.
The impact of this extra competition was exacerbated by a Google Algorithm update that same year, which made Digg links less valuable in search result rankings.
User experience issues
With increased competition and declining traffic, Digg decided to act with a now-infamous site redesign in August 2010.
The new design was widely criticized by users because it removed many popular features, including the ability to bury posts, save favorites, post videos, and sort by subcategory.
Moreover, the platform became buggy, and users were frustrated that they couldn’t communicate with other users directly.
Perhaps most damaging of all, the updates were implemented without regard for user feedback.
This alienated Digg’s user base and caused mass migration to Reddit, maintaining user trust by remaining consistent throughout.
Platform abuse
Digg’s reputation as a democratic news service where everyone could submit links and vote quickly devolved into an oligarchy of power users.
Each power user disproportionately influenced votes because of their large and devoted following.
Whenever they submitted a link to Digg, their followers would game the system by populating the front page with their content.
Investor pressure to make Digg profitable also resulted in the essence of the platform being abused.
The platform has become among the most popular social network of our times, thanks to the ability to have subcommunities create their digital environments so that users can freely express themselves.
Reddit is a social news and discussion website that also rates web content. The platform was created in 2005 after founders Alexis Ohanian and Steve Huffman met venture capitalist Paul Graham and pitched the company as the “front page of the internet.” Reddit makes money primarily via advertising. It also offers premium membership plans.
Some people find marketing on Reddit outdated, yet where Facebook and Instagram are today’s traditional marketing channels, Reddit has the nature of being unconventional amongst them. Reddit can be a great viral channel to cheaply amplify your brand and fill the top of the funnel.
Google is a platform, and a tech media company running an attention-based businessmodel. As of 2021, Alphabet’s Google generated over $257 billion in revenue. Over $209 billion (over 81% of the total revenues) came from Google Advertising products (Google Search, YouTube Ads, and Network Members sites). They were followed by over $28 billion in other revenues (comprising Google Play, Pixel phones, and YouTube Premium), and by Google Cloud, which generated over $19 billion in 2021.
The organization doesn’t monetize the user directly in an asymmetric businessmodel. Still, it leverages the data users provide and technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data and its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly. Still, it leverages the data users provide and technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data and its algorithms sold to advertisers for visibility.
Facebook, the main product of Meta, is an attention merchant. As such, its algorithms condense the attention of over 2.91 billion monthly active users as of June 2021. Meta generated $117.9 billion in revenues, in 2021, of which $114.9 billion was from advertising (97.4% of the total revenues) and over $2.2 billion from Reality Labs (the augmented and virtual reality products arm).
TikTok is a Chinese creative social media platform driven by short-form video content enabling users to interact and generate content at scale. TikTok primarily makes money through advertising, and it generated $4.6 billion in advertising revenues in 2021, thus making it among the most popular attention-based business models or attention merchants.
Instagram makes money via visual advertising. As part of Facebook products, the company generates revenues for Facebook Inc.’s overall businessmodel. Acquired by Facebook for a billion dollars in 2012, today Instagram is integrated into the overall Facebook business strategy. In 2018, Instagram founders, Kevin Systrom and Mike Krieger left the company, as Facebook pushed toward tighter integration of the two platforms.
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, and it generated more than $28B in revenue by 2021. YouTube also makes money with its paid memberships and premium content.
Twitter makes money in two ways: advertising and data licensing. In 2021, Twitter generated $4.5 billion from advertising and $570 million from data licensing. While Twitter generated $5 billion in total revenues, it lost 221 million.
Quora is among the most popular Q&A platforms, where people can post questions and get answers to any question. Quora is also a great content marketing platform, where it’s possible, with the right strategy to amplify your content and build a strong brand and convert traffic in potential customers.
LinkedIn is a two-sided platform running on a freemium model, where to unlock unlimited search and other features, you need to switch to a paid account. Acquired by Microsoft for $27 billion in 2016, LinkedIn made $5.2 billion in revenues in 2018 and nearly 630M members by October 2019.
Discord makes money in several ways. From its Discord Store, where users can buy premium games, to the seller shops, that primarily works with a 90/10 revenue share for developers and game sellers. And the ability for sellers to get more visibility on the platform by adding features to the game visibility.
WeWork is a commercial real estate company providing shared workspaces for tech start-ups and other enterprise services. It was founded by Adam Neumann and Miguel McKelvey in 2010. WeWork’s business model was built on complex arrangements between the company and its landlords. There were also several conflicts of interest between Neumann and WeWork, which provided the impetus for the failed IPO and significant devaluation that would follow.
Netscape – or Netscape Communications Corporation – was a computer services company best known for its web browser. The company was founded in 1994 by Marc Andreessen and James H. Clark as one of the internet’s first and most important start-ups. The Netscape Navigator web browser was released in 1995 and became the browser of choice for the users of the time. By November 1998, it had been acquired by AOL, which tried unsuccessfully to revive the popularity of the web browser. Ten years later, Netscape was shut down entirely.
Musically, or Musical.ly as it is officially known, was a Chinese social media platform headquartered in Shanghai. After passing 200 million users in May 2017, the platform was shut down by tech company ByteDance in November. After its acquisition, ByteDance suggested Musical.ly would continue to operate as a standalone platform. Company representatives noted that it would be able to leverage ByteDance’s AI technology and enormous reach in the Chinese market. Musically was ultimately absorbed into TikTok in June 2018, with the app no longer available in August of the same year. Existing users were offered technical support and several new features as a sweetener.
Vine was an American video social networking platform with a focus on looping video clips of six seconds in length, founded by Dom Hofmann, Rus Yusupov, and Colin Kroll in 2012 to help people capture casual moments in their lives and share them with their friends. Vine went on to become a massively popular platform. Yet by 2016, Twitter discontinued the mobile app, allowing users to view or download content on the Vine website. It then announced a reconfigured app allowing creators to share content to a connected Twitter account only. This marked the end of Vine.
CNN Plus was a video streaming service and offshoot of CNN’s cable TV news network that was launched on March 29, 2022. The service was ultimately shut down just one month after it was launched. Trouble began for the platform when parent company WarnerMedia merged with Discovery. The latter was unimpressed with paltry viewer data and, with $55 billion in debt to clear, was not interested in funding CNN+ moving forward. Other contributing factors to CNN Plus’s demise include a lack of compelling content and streaming service market saturation.
Clubhouse is a social app that allows thousands of people to communicate with each other in audio chat rooms. At one point, the company was worth $4 billion and boasted users such as Mark Zuckerberg and Elon Musk. Clubhouse declined because it rode the wave of pandemic lockdowns and suffered when people resumed their normal routines. The decision to remove the invite-only feature also caused a rapid influx of new members and removed any exclusivity. Clubhouse management also failed to define a business model and was unaware of the components of a successful social media site.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
