Is Digg facing a takeover?

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When Microsoft paid out $240m for a 1.6 per cent share of the social networking phenomenon Facebook, it single-handedly managed to up the stakes in the marketplace in quite dramatic fashion.

Not least because Microsoft has bought itself influence in the Facebook empire; far from it, it seems, with even the more sympathetic observer likely to regard the deal as 'a gamble'. No, its key move was to ratify the $15 billion valuation that Facebook's owners had placed on it, thus seemingly moving the price tag for every other social networking site heavily north. In one swoop, it could have cut Yahoo's chances of buying into a major social networking platform, for instance, and it's certainly scared plenty away from buying Facebook outright as a result.

But it's also generated real interest in the marketplace too, and the inevitable result of much speculative attention is a service that's no stranger to potential takeover talk: Digg.

The background

Digg is one of the overriding success stories of the Web 2.0 trend, and pretty much stands alone as a web service that can single-handedly turn others into a success too.

There's an indicator of Digg's influence at the bottom of this story. IT PRO, along with many other web destinations across the internet, now feature stories that at the bottom include an invitation to submit stories to Digg. And the reason is simple: a successful Digg can bring in a dramatic influx of traffic. Sure, there are also invitations to rival services such as Reddit, Yahoo-owned Deli.Icio.Us and Slashdot, but it's the Digg numbers that the majority of websites are chasing. And with 17 million visitors a month passing through the Digg.com page, there's plenty to go round.

The actual principle behind the Digg service has remained pretty much unchanged since it was founded by a group of four (Jay Adelson, Owen Byrne, Kevin Rose and Ron Gorodetzky, all of whom are still active in the company) back in 2004. Their plan was to initiate a site that could promote stories on others through a democratic system, rather than allowing editors to determine what gets priority and what doesn't. As the site proclaims in its 'About Us' section, "From the biggest online destinations to the most obscure blog, Digg surfaces the best stuff as voted on by our users".

In theory, then, a user could peruse the internet, find something they like, and 'Digg' it. One Digg equals one point, and should several hundred, or even thousand, users feel the same way, then the score rockets. A high Digg score, supposedly, then shoots a story to the front of the site, and pretty much guarantees a huge procession of traffic to the website in question, on occasion bringing the recipient site to the point of collapse. On the flip side, users also have the option to 'Bury' stories that they dislike, or feel are being inappropriately dug.

The impact

There's little doubt about it: Digg can pretty much instantly direct tens of thousands of visitors to even the smallest of sites, and that's why so many are keen to encourage their visitors to utilise it. Tens of thousands of users, after all, are ripe for conversion into advertising pounds, and thus no wonder so many are keen to attract the attention of the Digg user.

But like most democracies, there are frays around the edges. Some, for instance, question the subtle editorial control that the Digg management exerts on its site. Many have alleged that anti-Digg.com stories tend to be quietly buried, for instance. And it's also very much a two-sided coin: while even a few dozen users Digging can direct traffic to a website, a number of people burying a story can have the opposite effect. In fact, there's a strong argument that the impact of Burying a story is far in excess of Digging it.

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