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Digg is facing issues on two fronts. First, it’s struggling with delivering unique value to its customers. When Digg launched in December 2004, it faced limite
by mjfern 16y ago
Digg is facing issues on two fronts.
First, it’s struggling with delivering unique value to its customers. When Digg launched in December 2004, it faced limited direct competition in the market of social media aggregation. Since its launch, Digg now competes with a myriad of services, such as Reddit (launched in 2005), Techmeme (2005), Huffington Post (2005), Newsvine (2006), and Hacker News (2007), just to name a few. There are now a huge variety of media aggregation websites targeting general and niche audiences. In addition to increased direct competition, Digg is now also facing a substitution threat posed by companies such as Facebook (2004), Twitter (2006), and Google Buzz (2010). An increasing number of consumers are turning to these services for their daily fill of news.
Second, Digg is struggling with an untenable cost structure. With about 72 employees before its reduction in staff, Digg has about 9x the number of employees of Reddit, a key competitor. Consider another competitor, the Huffingpost. It attracts about twice the number of visitors per month, employing a full-time staff of just 60. Commentators have also noted that Digg had unusually high infrastructure costs, although I suspect they have remedied some of these issues since these reports. With revenue of just $15 million, and a unsustainable cost structure, Digg is currently operating at a loss.
For Digg to survive and prosper into the future, it must refocus and develop a service that delivers unique value relative to the many competing services that are currently available. Given the range of competition, it’s not clear what Digg can change to deliver unique value. Next, Digg must continue to reduce its cost structure by reducing its human resource and infrastructure costs. Needless to say, increasing value for customers while reducing costs is a difficult challenge.
- pg 16y agoHN doesn't seem a significant threat: http://traffic.alexa.com/graph?&w=400&h=220&o=f&c=1&y=p&b=ffffff&n=666666&r=3m&u=digg.com&&u=ycombinator.com& http://traffic.alexa.com/graph?&w=400&h=220&o=f&...;
- mjfern 16y agoPerhaps HN isn't a significant threat, but it still poses a threat; each new service likely eats away at Digg's share of the market, assuming that people have limited time to use social media. As an anecdote, I was using Digg substantially up until the 2008 elections. I haven't used the service since then. Instead, I'm spending time on Hacker News (+ Techmeme, Twitter, Facebook).
- csomar 16y agoYou are no longer using the service because the signal/noise ratio is crumpled. It's what happens when there are lot of new members and little moderation as well as abusing/power users. HN is a niche social website and I don't think that it eats from Digg or any other social website.
- evgen 16y agoHM alone does not, but one of Digg's problems is that they are facing a pack of ravenous midgets that focus on one specific niche. If you are interested in a small selection of niches then Digg is simply a useless place to go for information -- what you care about will never surface and all you see is a bunch of articles trying to game what remains of the general interest audience Digg once commanded. You could walk down a list of all of the major Digg categories and list two or three sites that do the job better for that specific niche; this is what is going to kill Digg. Digg is like an online social newspaper, and it is suffering the same fate that the print versions have gone through with better competitors peeling off profitable niches and leaving a dull husk behind.
- iampims 16y agoDo pageviews really matter on a community site? I'd say that it's more about quality than quantity, and the overall quality of comments/members on HN is not as diluted as it is on digg or even reddit. That's mostly why I've stopped spending time on digg and reddit.