Digg’ing your own grave

Reddit is a pretty amazing site.

An early “social news” startup, its founders sold it to a large media company in 2006, and rather than what usually happens in that case — the site shutting down or being subsumed by another property — it continued to grow healthily. Now, it’s probably a top-50 web property, and one of the top-10 drivers of traffic to news sites online (according to our own data at Parse.ly).

Digg, on the other hand, is the “also-ran” in this space. Rather than staying fervently focused on its community, it went through a series of redesigns that resulted in traffic attrition and, as recently reported, a final collapse, where Digg was sold for scrap parts to Betaworks.

The collapse is a great illustration of the bidirectional relationships that exist in the online media and link economy. As Digg alienated in its community, it became a weaker and weaker source of external referrer traffic to the major online media outlets. This resulted on media companies re-focusing their promotion efforts on the more vibrant and higher ROI sources, such as Twitter, Facebook, and yes, Reddit. As was reported by WSJ and then discussed by Yahoo News, Digg currently ranks 17th as an external driver of traffic to major media sites, behind Twitter, Facebook, Reddit, and even new entrants like Pinterest.

Today, most people find new stories through Google search, but social networking sites are catching up.

Parse.ly, a New York-based tech start-up that analyzes Internet traffic data for publishers like Atlantic Media and Mashable, found that over two days in July, a little more than half of traffic referrals came through Google, and about 14.3% through Facebook… Digg accounted for just 0.35%, ranking it 17th after sites like AOL, Pinterest and Yahoo Ads… Other contemporaries of Digg’s, including content discovery search engine StumbleUpon, have also survived. That company, which was sold to eBay for $75 million in 2007, is ranked fifth on the referral traffic list.

The lesson? Successful social networks are built around communities, not features and redesigns. Google+, are you listening?

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