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Digg Valued At $175 Million In Latest Funding
Digg’s latest funding round valued the company at “around $175 million” we’ve heard from a source with knowledge of the deal. The company raised nearly $29 million in the round, which was announced earlier this month.
The valuation seems about right for the company, which attracted 15.7 million worldwide visitors in August, up from 10.1 million a year ago (Comscore) (click here for Quantcast data, which shows much higher traffic). The financing was a second choice for Digg, which thought it was getting bought by Google for $200 million until a last minute glitch killed the deal. After it was clear the deal wasn’t going to happen, the company pursued a financing instead.
We’ve also confirmed that founder Kevin Rose and CEO Jay Adelson sold some personal stock in the transaction, as GigaOm first reported. However, our sources say the dollar amount they each took off the table was relatively small, about $2 million each, and that the venture capitalists had an appetite for more (since they’re the ones buying the stock). That’s good news for the company because it shows Kevin and Jay, at least, think the valuation was low, and were willing to keep their stock in play.
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Jay Adelson Hints That Facebook Connect Is the Future of Digg
A few select partner sites are beginning to roll out their integration with Facebook’s ID system through Facebook Connect. Last week, a CBS site was the first one to do so, and more are expected to go live soon. Digg will be one of them. (Other announced partners include Six Apart, ABC, CBS, Hulu, Kongregate, Loopt, Plaxo, Seesmic, StumbleUpon, Twitter, Vimeo, and Xobni). During a speech at the Web 2.0 Expo last week (video embedded below), Digg CEO Jay Adelson hinted at how Facebook Connect could help the social news site take “the next step of collaborative filtering” and how it is tied to the “future of Digg.”
At the most basic level, Facebook Connect will let you sign into Digg and all of these other partner Websites with nothing more than your Facebook username and password. Facebook wants to become the universal ID on the Web, and any progress it makes on that front would be a big deal in its own right. But Facebook Connect goes well beyond an ID management system. Partners can tap into all sorts of social data people put into their Facebook profiles, and actions on partner sites can be reflected back on your Facebook News Feed in a Beacon-like manner.
For Digg, Facebook Connect will help it personalize the headlines it shows to each member. During his presentation at Web 2.0 Expo, Adelson said:
We are about to add like 90 million registered Facebook users to Digg. How can I take that so your Frontpage experience is particular to you?
Adelson’s speech was about collaborative filtering and how the general, zeitgeist-type of collaborative filtering that Digg does already is merging with the more personal filtering that occurs on your activity stream in Facebook and elsewhere. He believes that the combination of the two will be particularly powerful:
It is the next step of collaborative filtering. It is the idea that instead of looking at a social network that you’ve created yourself, that you’ve entered in the names, I am going to look at all of you, everyone, and I’m going to compare you all together. I am going to find people like you and I am going to use that collective wisdom to find things that are more specifically interesting to you.
. . . When I think about the future of Digg. We have 16,000 submissions a day to the Digg platform. How are we going to take all of that data and make it interesting and relevant without this idea of the collaborative filter? Initially all we had was Diggs and buries. But I have a lot more data about how you use the data, where you come in from, and what your interests are.
Digg is already moving in this direction with its new recommendation system, which has resulted in a 40 percent increase in Diggs. But Facebook has a much richer set of data about your personal likes, dislikes, and recent activity across a broad spectrum of interests.
What Adelson is suggesting is that it is not enough to know what your group of self-selected friends and followers are buzzing about. What you really want to know is what are like-minded people buzzing about whether you know them or not. This is not a particularly new idea. (Last.fm, for instance, has been using this approach and the concept of musical “neighbors” to create personalized music recommendations for years). But what is new is the fact that a site like Digg will be able to improve its own core service by tapping into someone else’s repository of social data. And arguably, Facebook has a bigger and better repository of such data than nearly anyone else.
(Hat tip to Paul Sanchez for spotting the video).
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Digg Cleans House, Bans 80+ Script Users
Reports are bubbling up that Digg has permanently banned over 80 users for running scripts that help them automatically perform certain tasks on the site.
The mostly lengthy account has been published on the Get Smart Blog under the title The Grim Reaper has visited Digg. The post lists 86 usernames that were unceremoniously dropped from the site without forewarning. The tone of the author and his commenters, all apparently Digg users (or ex-Digg users) themselves, is dramatic: “So many brave and valiant Diggers…it is a tragedy of unspeakable proportions to see such wasted talent.”
Among those banned was a user named Diggboss who had developed a GreaseMonkey script for checking up on friends to see whether they’ve dugg the items that you’ve submitted or shouted. The script used Digg’s own APIs and didn’t automatically Digg any stories, yet Digg’s Terms of Use vaguely prohibits “automated means to access the Site” and any “organized effort that in any way artificially alters the results of Digg’s services.”
In an official blog post from last week, Jen Burton from Digg suggested that scripts were primarily forbidden because they “place additional load on Digg servers (slowing things down for everyone)”. It’s quite clear, however, that Digg is also concerned with preventing users from gaming the system by recruiting their friends. The Duggboss script may not have automatically submitted stories, but it did help users pursue a strategy of scratching backs for homepage hits (a strategy that ensnared Mark Cuban’s own brother).
Many users are defiant that Digg should dismiss long-time contributors on the grounds that they had run scripts. And some think Digg is shooting itself in the foot by giving users reason to jump ship:
Script? All I have to say about that is WHO CARES! Is Digg doing great in traffic and usage? YES! The site could be a little easier to use if you ask me and if script enables people to use it faster….. so be it! It only works in Digg’s favor and you would think they would understand that. It will be very interesting to see what happens in the next few months. Digg might just become a ghost town and Yahoo Buzz could be the next guru.
But that’s nothing new.
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Digg Grabs Senior Yahoo’er To Lead Communications
Will the last person out please turn off the lights: Yahoo’s Director Communications & Communities Kiersten Hollars (pictured right along with CEO Jerry Yang and President Sue Decker) will shortly be leaving the company to lead Digg’s communication team.
Hollars previously reported to Brad Garlinghouse, who announced his departure in mid June. Her previous boss, Bradley Horowitz, is also gone - he left for Google in February.
This is the second reported departure from Yahoo today. More are certainly coming.
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Veritocracy = Digg + Techmeme (500 Invites)
As a concept, Veritocracy is actually quite simple. At its heart, social news site pulls together some of the better qualities of Techmeme — targeted stories and related posts to an original story — and Digg. Once you get to the front page, you’re immediately presented with a nice layout of highly-targeted stories on topics ranging from politics and technology to business and entertainment.
The site collects what it deems to be the best perspectives on various subjects from around the Web, groups them together by topic, and lets its users decide which is best through the use of a voting system. As a user votes on different stories, Veritocracy becomes more personalized to that specific user’s tastes. And as long as that engine works well, Veritocracy claims publishers will be able to find the ideal target audience and readers will find stories that fit their interests.”The ultimate objective,” says CEO Lee Hoffman, “is to create a truly meritocratic content distribution system where each article a writer publishes finds its way to the individual readers that will actually want to see it.”
Before that can happen, Veritocracy has a long way to go. Right now, the site is in private beta and is slowly working its way towards a wider release later this year. If you want to check out Veritocracy for yourself, Veritocracy sent us 500 invites for TechCrunch readers. To redeem your invite, type “techcrunchlove” into the invite box, sign up, and start using it.
After trying it for a while, it quickly becomes apparent that if users find reasons to use this site and the company can deliver on its lofty promises, Veritocracy could become a destination for news junkies.
In each category, you’re presented with a story — “Palin takes the stage on night two at the convention” for example — that can be clicked on. Once you click that link, you’ll drill-down into perspectives on the Vice Presidential nominee’s speech last night at the Republican National Convention. Some say it was great, others are more suspect of its success. From there, you can click on the links to be brought to the respective article or you can vote them up or down based on your own opinion on the subject.
As votes start accumulating, Veritocracy promotes the better stories to the top. At the same time, each of your votes is recorded and remembered to help create a more enjoyable experience the next time you come back to the site. In other words, if you continually vote stories by conservative pundits down in the politics section and you tend to enjoy stories that are more “cranky” in the technology section, Veritocracy will tailor your experience based on those votes.
As CEO Hoffman points out, “Veritocracy isn’t a popularity contest, so voting up all of your friends’ content will only cause you to see more of their stuff, and the stuff they like.”
That in mind, the success of Veritocracy depends on the honesty of its users. The name “Veritocracy” is derived from the concept of meritocracy: those stories that deserve to be best will be. If users vote for those perspectives that deserve to be promoted, the site should run as designed: the best stories on each topic will rise to the top, and the greatest number of users will have a personalized experience. How will Veritocracy fight people trying to game the rankings? Hoffman explains:
We do this by learning how effective each user on the site is as an editor for you by comparing your vote histories. Unlike other personalization/recommendation systems (think Amazon, and Digg’s new recommendations) our system significantly ramps up the accuracy of these predictions by using a market based design layered over the standard personalization algorithms.
If you submit crap, miscategorize your articles, or even vote for other people’s crap, readers won’t be voting for the same things you are (and may even vote down things you vote up) and thus the the system will uncorrelate you from everyone (or won’t correlate you to them in the first place). This will make sure your content and votes have less chance of effecting what other users see in the future. Of course, a lot of the time “crap” and “quality” are entirely relative, and that’s where the system really shines because it learns to distinguish this for each user, based on the same design principal.
Veritocracy also lets the original authors of stories submit them on different topics. (Veriticracy funnels all stories into consistent topics instead of tags). After a specific topic is identified, users can upload their own stories, which will then be placed as a perspective on the given topic. Once there, other users can vote it up or down based on its quality and relevance to the topic.
But because so much of Veritocracy’s success relies on its community, it’s tough to say how well it will perform—for now, few even have access to it. But the site has promise. It just needs more participation.
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Want On The Digg Home Page? That’ll Be $1,200.
InvespBlog has published what it claims is an interview with a top Digg user - someone who has a 34% success ratio in getting submitted stories to the home page of Digg. The Digg user isn’t named - he or she says “I have a reputation to withhold” (we know what they meant).
In the interview the user talks a little about how he’s able to get stories to the home page of the Digg news site and drive significant traffic back to the destination, despite the increasing popularity of the site. There isn’t much that will surprise people, the user simply does a lot of networking and reciprocal voting with other top users.
But the user also claims to charge for his services. A submission is $300-$500 based on the “quality of the article,” with no additional “promotion.” If you want your article promoted it’s a flat $700 fee. An additional $500 is charged if it gets to the home page. That’s a grand total of $1,200 for a home page story, and you don’t even get guaranteed results.
Digg knows this kind of manipulation goes on, and wages a never-ending battle to try to keep spamming to a minimum. It seems to have worked in keeping organized spamming schemes from making any real progress. But on an individual level there isn’t much Digg can do to stop top users from selling their influence.
Way back in 2007, Netscape even tried paying top Digg users directly to defect to their new service, so there is no denying that you can make money by being good at spotting a likely popular story.
One thing this tells me is that Digg should strongly consider placing clearly labeled advertisements within the news stories. Even as paid ads they’ll get a ton of traffic and Digg can charge accordingly. TechMeme, a tiny site in comparison, has done this successfully for some time. If Digg can’t stop its users from making a little money on the side, they may as well get in on the game.
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Yahoo Buzz Opens Doors To Everyone
Buzz, Yahoo’s Digg-like effort to leverage reader gestures and third party content in determining the most popular news, removes it’s barriers to entry tonight.
Until now only a hundred or so invited publishers could post news to Buzz. This was a big plug - Yahoo pushes a few Yahoo Buzz stories to their home page every day, resulting in huge, server-melting traffic surges to the lucky third party sites. Starting tonight, the invitation requirement is gone, and anyone can submit their stories to Buzz.
It’s hard to compare Buzz to Digg. Like AOL’s Propeller, they chose to add editorial discretion in determining headlines to reduce gaming. That also seems to make users less interested in participating, though. In Yahoo’s case the fact that they promote headline stories on the home page of Yahoo gives them a huge traffic boost, which skews results.
Stories can be submitted here once it goes live in a few hours.
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Digg Debuts Its First Firefox 3 Extension
In a post to the official Digg blog, Kevin Rose has announced a new Digg extension for Firefox 3 that incorporates a toolbar and notification system into the popular browser that should appeal to heavy and casual Digg users alike.
In a video introducing the extension, Kevin Rose says that its main purpose is to get a feel for what features users would like to see incorporated into future releases. The extension was developed for Firefox 3, but users can download a Firefox 2 compatible extension here.
Small notification messages now appear in the bottom right of the browser window, displaying updates on topics you’re covering along with your friends’ recent activity (you can specify what events you’d like to receive notifications for). The collapsible toolbar includes a counter that indicates how many Diggs and comment the current page you’re browsing has received, and includes a “Digg It” button that allows you to submit and Digg stories without having to visit the site.
Digg Firefox 3 Extension from Kevin Rose on Vimeo.
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New Recommendation System = 40 Percent More Diggs
One month after launching its new recommendation system, Digg is already reporting positive results. Digg recommends stories based on other members with similar voting patterns and interests. Chief scientist Anton Kast writes on the Digg Blog:
- Digging activity is up significantly: the total number of Diggs increased 40% after launch.
- The Recommendation Engine is running strong: at any given point in time, the system is generating over 54 Million Recommendations, with the average Digger having nearly 200 Recommendations from an average of 34 “Diggers like you”.
- Friend activity/friends added is up 24%.
- Commenting is up 11% since launch.
Digg’s recommendation engine takes a Last.fm approach to finding people’s whose tastes overlap with yours and then suggesting stories they’ve Dugg up but that you’ve missed. It is collaborative filtering for news.
As Digg becomes more mainstream, it needs technologies such as this to bring it back to its glory days when everybody was interested in the same niche categories. Social recommendations work best when they are extracted from niche communities who are obsessive about one or two topics. Digg started out as a haven for hardcore techies, but has branched out.
The recommendation system is designed to, in effect, help Diggers carve out their own niche communities again. If you happen to like tech industry news, you will see stories from other like-minded Diggers. If you prefer politics or sports, you’ll get those stories. And if you like a combination, the system will grab recommendations from each appropriate bucket.
At least, that is how it is supposed to work in theory. The recommendations seem decent. But I personally haven’t noticed anything that really strikes home. Over time, it should get better.
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Google Walks Away From Digg Deal
The Google/Digg acquisition negotiations were in full swing as of last Tuesday, had passed the term sheet stage and the two companies were in final negotiations in the $200 million range. But sometime this last week Google decided to walk from the deal. Digg was notified on late Thursday or Friday.
Google was in the due diligence stage of the deal, where they peer deep into Digg’s technology and financial statements. Most term sheets are non binding, so anything that gives the buyer pause can be used as an excuse to walk away - but generally the buyer already has a very good idea what they are getting well before the term sheet stage.
Two sources close to the companies suggested that some issue that came up during technical due diligence was to blame. One source said that the issue was more personality driven, and that Google decided after spending more time with Digg’s top team that there just wasn’t a fit.
Either way the deal appears to dead and can be added to the long list of failed Digg acquisition deals. And when a company is “left at the altar” other buyers are usually hesitant to step in.
So what will Digg do now? We’re hearing they’ll just push through with a new round of financing. Digg hired Allen & Co. to represent them in the sale, but the investment bank is just as good at closing massive venture financings, too (they represented both Slide and Ning in their recent a half billion dollar valuation financings).
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Digg To (Finally) Integrate OpenID, If This Picture Is To Be Believed
When Digg’s Lead Architect Joe Stump took the stage at the Facebook Developer Conference in San Francisco earlier today, something in one of his screen shots caught our attention. He was there to show how users will soon be able to log in to Digg without an account via their Facebook credentials (the new Facebook Connect product). But also included prominently in the screen, but not mentioned by Stump, was an option to log in via OpenID.
Digg founder Kevin Rose promised OpenID integration at a conference in early 2007, but the company has been silent on it since then. Like many other companies, they seemed to enjoy the positive press that the announcement made but were unwilling to schedule the development time to actually implement it.
Facebook Connect isn’t slated to go live until the Fall, and we assume they’ll push OpenID at the same time. We asked OpenID’s David Recordan what he knew - he said he noticed the same thing we did but doesn’t have any additional information on when or if Digg would finally implement the single sign-on solution. We also have an email in to Digg for comment.
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Liveblogging the Facebook Developer Conference
The TechCrunch team is on site at the Facebook Developer conference, and we’ll be live blogging the news. Mark Zuckerberg’s Keynote starts at 1:30 pm PST.
Facebook’s press release is here.
Live Coverage
In a press briefing after the keynote, Zuckerberg stated “I wish I knew” when asked when the anticipated payments system would launch. He also hinted that Facebook is working on launching improved search, but they aren’t close to launching it yet.
2:49 PM: That’s it. The show is over.
2:48 PM: Great Apps can integrate with users just like native Facebook apps, and they get early access to features. The Great Apps program is in alpha stage and the first two partners are iLike and Causes. There will be a strong enforcement system with all apps, and they will disable apps that are a problem. Over the last year they’ve disabled apps for violation of privacy or other policies. They take this very seriously, he says.
2:47 PM: The second announcement is the Facebook Great Apps Program (Top Tier program). They embody all ten of the guiding principles, and they advance the mission of Facebook.
2:46 PM: They’re announcing two new programs: a verification program is first - this is the lower tier of the two programs. Starting in September they will invite apps that are secure, respectful and transparent to apply to be verified. Trusted apps get a special badge in the directory and app page. (we posted on this earlier, here)
2:44 PM: They have partnerships with partners to help developer (Microsoft), host and scale. They are launching a new developer website that gives all the information needed for a quick start. He says 1000 apps have been submitted to the Facebook fund. They are revealing the names of fbFund’s recipients to date: Challenge, ConnectedWeddings, Podclass, MyListo, Trazzler, Zimride, LuckyCal, Coursefeed, Hotberry, and J2Play.
They are announcing a new competition today. $2M will be given out over the next two months. Facebook will select 25 finalists who will each get 25k. Users will vote on finalists who will each get 250k.
2:43 PM: He says they must keep the ecosystem safe for users and fair for developers. A year ago equal distribution became overwhelming to users, then they made restrictive changes that hurt apps. Going forward they will have different rules. They are announcing several programs to help app developers. Get Started Quickly tools like adding easy FBML tags.
2:42 PM: He says that they’ve learned a lot in the last year, as they’ve had lots of challenges. Facebook is listening to the community. They’re trying to partner more closely with developers. He says they are making organizational changes that let developers incorporate feedback during the dev process, and they’re creating full time community management organization
2:40 PM: “Security is a big part of it, apps can’t share information with other users unless they obey privacy settings. Apps must also be respectful of the users attention and time. Don’t make users invite 20 friends before you use the app, or spam friends without them knowing. Apps must be very transparent. Users should get what they expect when they click, not an interstitial ad. Design is also important - clean design is a must. And apps must be fast loading and responsive. As the apps get faster, users use them more. Apps need to focus on being robust and scaling properly as they grow.”
2:39 PM: “Building trustworthy applications is important because we live in an ecosystem with network effects. If users leave, everyone suffers. Apps must be safe and trusted.”
2:37 PM: He says apps must be useful. The carpool app is great example, which lets users find carpool buddies. “Apps must also be expressive”- The graffiti app that lets users draw on friends profiles, is a good example. Finally, meaningful apps must be engaging. He says Playfish makes games that are highly engaging. Facebook users have played over 900 million minutes of Playfish games. That’s about 1800 years.
2:35 PM: Benjamin is announcing “guiding principles for great applications” which are based on dialog with community. It’s based on three pillars: meaningful, trustworthy and well designed. The best apps make use of the social graph. Applications must be social. A good example is the Lil Green Patch app, which helps users fight global warming by interacting with other users.
2:33 PM: Benjamin Ling, Director of Platform Program Management is now on stage talking about the “State of Platform.” He says that over $200m has been invested in Facebook apps, $34m this week alone. Additionally, 13 different ad networks have launched that pay out tens of millions of dollars to app developers. He says, “venture capital, ad networks, developers and academics are the ecosystem that makes Facebook platform a success.”
2:32 PM: Mark wraps things up, that appears to be the end of the announcements.
2:31 PM: Zuckerberg asked all Facebook employees who work on platform to stand up, then asked all app developers to stand up.
2:29 PM: “Give people the power to share and make the world more open and connected.” - Facebook’s mission statement
2:28 PM: To recap, he’s talked about new profiles and the highlighting of the news feed, the second item is Facebook Connect. The new profile launched Monday, he says. Facebook Connect will launch developer keys starting today - there will be a beta period.
2:26 PM: That’s it for launch partners. Mark is back on stage.
2:25 PM: A new site will have a “my friends” tab that shows reviews by friends in various cities.
2:23 PM: Mike Philips from Citysearch is taking the stage. He says they are launching a new site, where sharing information is a big piece. They are integrating with Facebook Connect. When a user looks for a hotel, restaurant, etc., Citysearch already has lots of reviews and data, but not a way to link up reviews from friends.
2:22 PM: When you login to comment, users can sign in via Movable Type or Facebook. If you sign in with Facebook, it will display changes - light blue boxes outline your friend’s comments.
2:20 PM: David Recordon from Six Apart just took the stage. They are releasing a plugin for Movable Type that allows people to comment using their Facebook profiles. Users can decide to profiles or keep them private.
2:17 PM: Digg is now allowing people to sign into Digg via Facebook or OpenID. There is no requirement to sign up for a Digg account.
2:15 PM: Launch partners are now coming on stage. First up is Digg by Joe Stump.
2:13 PM: Facebook Connect can show you which of your Facebook friends are also on the outside service, so you can link up with them there too. They are also allowing people to leave comments and requests on third party sites.
2:12 PM: Facebook Connect will let applications share data with Facebook. Users can bring Facebook friends with them to outside sites.
2:11 PM: Mark is now talking about Facebook Connect.
2:10 PM: He says he wants Facebook to be the platform and tools provider, but let apps do anything social they want.
2:08 PM: Mark says we are going to see the decentralization of social networking into apps on the web. Things will decentralize further, apps can run anywhere on the web, not just on social network platforms. They will all work together, just be decentralized.
2:05 PM: People (including us) are writing wall posts for Mark since he has his profile live on stage, but it looks like he’s actually using a fake profile, it shows just 8 friends.
2:03 PM: Mark is now showing a live demo of the new home page.
2:02 PM: Mark says they haven’t completely gotten rid of app boxes, they’re added a tab for them. Some apps really need them. Users can also add tabs for individual apps.
1:59 PM: He says the apps that leverage the news feed the best will be the ones that succeed.
1:58 PM: “The most important part of the profile is the wall and the news feed, which have now been merged. They also give developers an incentive to build apps that let users share a lot of information. This is a lot better than an application box, which people don’t interact with as much.”
1:56 PM: Mark is now talking about the new profile pages and how it fits in with their current goals.
1:54 PM: Mark says that over the last year Facebook hasn’t done enough to reward applications that provide a lot of long term value, and they haven’t punished the ones abusing the system.
1:53 PM: Mark is talking about lessons Facebook has learned. He says that they released the platform as quickly as possible, it wasn’t fully baked yet, and they didn’t anticipate the huge adoption.
1:52 PM: Mark says the most powerful tool on Facebook today is the News Feed. Traffic went up by 50% when they first launched news feed in late 2006.
1:51 PM: Mark is now talking about the social graph, a concept he introduced at the first f8 conference.
1:49 PM: LivingSocial just announced they received $5M in Funding, Flixster received $6M from Allen and Company, and Zynga got $29M from Kleiner Perkins Caufield & Byers. Zuckerberg says, “There has been more than $200 million invested in the ecosystem.”
1:47 PM: David Glazer (Director of Engineering, Friend Connect) is here in the audience (which is about 1500 people), it looks like he will announce something. Perhaps they are announcing some kind of agreement.
1:45 PM: “We’re opening up the translation tool to allow apps to be translated as well…We now have more than 400k developers building on top of the platform. The developer community is spread around the world. More than half are outside of the US.
1:43 PM: Mark is now talking about opening up Facebook for translations made by users. They started with Spanish and French, and now the site is available in over 60 languages.
1:41 PM: Mark is looking back over the last year and says it’s been pretty crazy. Over 24 million people were using Facebook a year ago - today they are at 90 million people.
1:38 PM: Mark says its time to take the Facebook platform to the next level. On a recent vacation he realized (1) they want to build a product that really lets you connect with people, and (2) they want to extend the concept of presence, have more open connections and share more. They want to make the world a more open place
“The most important information is only available if people share it, and have the power and the tools to do so”
1:35 PM: Mark takes the stage and welcomes the crowd.
1:30 PM: Still waiting for Mark Zuckerberg to take the stage.
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It’s Facebook Day! Say Hello To The Three Tier App System
Update: Our live notes from Mark Zuckerberg’s Keynote are here.
Today is definitely Facebook day as they hold their second annual F8 developers conference in San Francisco. Last year they released their developer platform, which led competitors to hurriedly release their own competing offerings. What’s in store for tomorrow? We’ve made our predictions, and CEO Mark Zuckerberg takes the stage at 1:30 to make his keynote, and workshops will follow all day after that. The full schedule is here.
Some of the news is breaking early. For example, we will almost certainly see the Facebook payments platform launch in some form, for example - Facebook desperately wants to find a way to help application developers make money beyond advertising, and the iPhone App Store has shown that people are willing to pay for quality applications.
Even more certain is the launch of Facebook Connect, which will allow third party services to authenticate Facebook users and merge profile data into their offerings. Digg will be one of their launch partners, and will show off the new product on stage, say our sources. However, neither CEO Jay Adelson or Founder Kevin Rose will attend the event.
We’ve also heard from sources that Facebook will announce a tiering system for applications, confirming our previous post in March. Five to ten top tier apps, which have proven themselves trustworthy and which create as good or better a user experience as what Facebook is able to create itself, will be named in the near future. iLike (music) and Causes (charity) will be announced tomorrow, and more will come soon. We heard that Flixster (movies) was on the short list but was bumped at the last minute - perhaps due to their MySpace partnership announced yesterday.
Other apps will be grouped into a middle tier, where most of them will fall, and a bottom “unwashed masses” tier for untrustworthy or spammy apps that have little user value. Each tier will have different rules for engaging with users, particularly around invites, messaging and entry into the news feed.
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Google In Final Negotiations To Acquire Digg For “Around $200 Million”
Google’s on and off negotiations with Digg have been back on in a big way for the last six weeks, we’ve heard from multiple sources inside and outside of Google. The two companies have reportedly signed a letter of intent and are close to a deal that will bring Digg under the Google News property. The acquisition price is in the $200 million range, says one source.
We first wrote about the Google-Digg negotiations in March. Despite a vigorous denial by Digg CEO Jay Adelson the negotiations continued, although Google’s Marissa Mayer reportedly cooled on the company for a period of time.
The companies are now in final negotiations according to our sources, although it could be a couple of weeks before it closes. And while the major deal points have been agreed on, the acquisition could still fall apart. Microsoft, which was previously interested in the company, may be willing to step back in at a much lower price.
Most of Digg’s revenue comes from a three year ad deal with Microsoft, which will be terminated on a sale to Google. Digg has raised $11.3 million in venture capital.
Meanwhile, Google’s fascination with the Digg voting concept continues.
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Propeller 2.0 Launches: Ditching The Vote Count, Adding A Mascot
Propeller, AOL’s Digg-like news site, launches version 2.0 later this morning. The site sports a new design and logo and now has a mascot - described as “part professor, part citizen journalist” (see image below).
But the biggest feature change is the removal of a pure Digg-like vote count. In its place is an algorithm based popularity ranking of 1-10, which takes into account “many more aspects of participation” when determining popularity. Voting on a story is now called the more nebulous “prop it.” The service has also cut down the number of news categories. Those remaining include Arts & Entertainment, Business & Finance, Family, Humor, News, Science & Technology, Sports and Style.
Taking a page from the Yahoo Buzz playbook, headlines from the service will also be integrated directly into AOL and AOL News.
Propeller has had a rocky history. It first launched in June 2006 under the Netscape.com domain as “a better Digg” in that paid editors chose the top stories from user-submitted and voted links. Soon the site was paying top Digg users to move to them.
In August 2007 rumors circulated that the site was going to be shut down. We called it “Kaput” last September, but we were wrong: the site would live on under a new domain, Propeller.com.
Netscape traffic promptly spiked downward, but Propeller, led by general manager Tom Drapeau, filled the gap and has had steady growth since then.
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Is This The Future Of Search?
The video above shows a user interface being bucket tested by Google to select (probably randomly determined) users. Earlier today we showed a screen shot of the interface and a video of the search history, recorded by Adrian Pike, the CTO of startup Tatango. This new video, however (also recorded by Pike), shows the full Google search experience with a very Digg-like interface. Users vote search results up or down - a down vote makes it dissapear with a “poof,” an up vote moves the result to the first page.
Google is also testing comments, with linked user names, and others can vote those comments up and down. In effect, this bucket test shows a Google that combines their search algorithm with every important feature of Digg. It’s something they’ve been working on for nearly a year in various iterations, but this is the first time we’ve seen user comments, and the video shows details that you just can’t experience via screen shots.
If feedback on this is positive look for it to be added to the Google Search experimental site where anyone can opt in to use it. It’s still many steps away from being integrated into everyday search on Google, but this shows quite clearly where their head is at - Digg.
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Google Continues To Test A Search Interface That Looks More Like Digg Every Day
A couple of days ago we posted screen shots of a new search interface being bucket tested by Google that lets users vote up or down on search results. The resulting interface was very Digg-like, and included a total vote count, etc.
Today Adrian Pike, the CTO of startup Tatango, noticed that the interface changed yet again and now includes user comments. Like Digg, each comment has an up or down vote feature as well, and Google is using thumbs up and down icons that are exactly the same as those on Digg. The comments show the username of the person leaving it, and clicking on it shows their Google account profile.
Also, Google shows the total number of votes both up and down on each result. If you hit the X down vote button, the result is immediately pulled off the screen.
He sent in the screen shot above as well as two videos. We’re working on the videos and will post them shortly.
Update: First Video, where Pike’s access to the new search features was temporarily disabled. The new interface subsequently came back up, we are still uploading that video:
Update 2: The second video is here.
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Digg Is Pushing More Traffic To Traditional News Sites
As Digg becomes more mainstream, so are the headlines linked to on its homepage. The once tech-heavy site long ago expanded into other categories such as entertainment, world, and business news. But that change is finally hitting its home page, either because Digg is attracting more mainstream users who are Digging more mainstream stories or it is using other (algorithmic) methods to point its firehouse in the direction of mainstream media. (Comscore shows 15.4 million unique visitors in May, and 6.3 million U.S. visitors in June).
Hitwise released some data today indicating that Digg now sends nearly as much traffic to entertainment sites as it does to news and media sites. As the chart above shows, 21.3 percent of its traffic goes to the former, while 20.7 percent goes to news and media sites. A year ago the gap between the two categories was a 50 percent gap, now it is a 3 percent gap. The traffic sent to entertainment sites as a percentage of Digg’s total outgoing traffic is down 20 percent, while the traffic it pushes to news and media sites is up 16 percent (although both are down since April).
This data confirms a trend that Allen Stern at CenterNetworks noticed last week. Namely, that UK newspapers in particular, like the Guardian, are showing up a lot more often on Digg’s homepage, displacing more familiar tech sites such as Ars Technica, Engadet, and Gizmodo. (When I checked today, about half of the stories on Digg’s homepage linked to traditional news sites). He also speculated whether this meant that Digg is trying to sell itself to the Guardian, which bought the blog network that owns PaidContent last week for an estimated $30 million.
That seems like a stretch, but showing that it can drive more traffic to traditional media sites would certainly make Digg more appealing to any potential acquirer. There has been no shortage of acquisition rumors over the years, but it would make more sense for a semi-neutral technology company like Microsoft or Google to make a bid than a media company with ts own properties to promote.
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Gosh, How Many Diggs Does It Take To Get To The Home Page, Anyway?
Back in June 2005 when I first wrote about Digg (six days after starting TechCrunch), it took just 15 diggs and a story was automatically sent to the home page of the then small and innocent site (there are lots of old screen shots of Digg in that post). Today it takes an average of 150 or so to get to the Digg home page, although that varies considerably based on the user who submitted the story and the domain name being pointed to.
But tonight some Digg users noticed something a little strange. This story had 936 votes 16.5 hours after it was originally submitted. That’s way beyond what’s normall needed to get on the home page. The next most popular upcoming story in its category had just 178 votes.
If a lot of users vote to bury a story it takes more votes to get to the home page of Digg. But those stories that get a lot of buries tend to be taken off of the upcoming section. In this case, that didn’t happen, and the story just continued to get a ton of votes by users, but was never promoted to the home page (from a brief perusal of the destination story, it seems that this is a story that should have been buried quickly). Perhaps the story just tread a fine statistical line between being promoted and buried, and went on collecting votes until Digg could figure out what to do with it.
So what’s the point? It’s clear Digg is continuing to struggle with vote gaming and trying to maintain their model of letting their users decide what news makes it to the top of the pile. As they add more hurdles and filters, the main side effect seems to be a delay in promoting hot news quickly. It also shows that even a thousand people working together can’t necessarily get a story to the top of Digg. Which is a good thing, I guess.
There are persistent rumors that Digg now employs editors to review upcoming stories before they are promoted, to increase quality. There’s certainly nothing wrong with that, but it does tend to undermine the theory that the crowd can make better decisions on what constitutes “news” than a single human being using common sense and their best judgment. Digg, for their part, deny that editors are involved in story selection.
Digg may ultimately prove to be a great business model for its founders and investors. But the news revolution that it appeared to be be vanguarding may eventually fizzle out. As, perhaps, will users if they ultimately discover they aren’t, in fact, in charge.
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Netvibes Gets All Digg-Like With Buzz
Personalized home page service Netvibes has quietly rolled out a new social feature called Buzz. The Buzz section tracks what links are getting starred the most throughout Netvibes network of home pages.
Netvibes users can star any of the links they like on their homepages, RSS readers, YouTube boxes, Digg widgets, and other widgets. And when items have been starred, they show up in users’ public activity streams, which can be displayed on home pages using an activity widget. With Buzz, these starrings are aggregated and displayed on a Digg-like front page where people can see what others are starring the most.
Buzz hasn’t been formally announced yet, but this is the first new feature we’ve seen since Tariq Krim announced he was stepping down from his CEO position.
While Netvibes lags behind giants iGoogle, My Yahoo! and MyAOL, it is the favorite among many early adopters for being fast and ad-free. With 2.4 million worldwide uniques in May, it makes sense to leverage its traffic for a link popularity tracker. There are already many social bookmarking sites, but adding a feature like this to an already-popular personalized home page service makes for easy adoption.
Buzz is currently on a separate page (and probably still in development), but we expect Netvibes to provide users with a widget that can be used to track popular items on their home pages. The name choice probably won’t go unnoticed by Yahoo either.
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Update: Digg Recommendation Engine Confirmed For This Week
Digg has released some materials around their new Recommendation Engine, which we wrote about last night, and say that it will be released this week. Two overview videos are below, including an interview with Digg Lead Scientist Anton Ka