What You Can Learn From the Downfall of Digg’s Social Network

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The downfall of Digg’s social network

First launched back in 2004, Digg was the very first social news site and also the true pioneer of the social bookmarking phenomenon. The site was extremely popular, but as they say, nothing lasts forever. In early July, the once prominent service was sold and divvied up in three parts: Betaworks got the website and technological assets, the staff went to SocialCode, a Washington Post property, and several patents went to business-focused social networking site LinkedIn.

So what happened? Why did Digg, a site that appeared to have so much going for it, just suddenly crumble? Well, this thing was a long time coming, and the reason it ended up floundering in the social space can be attributed to several factors.

Superior Competition

Competition tends to play a part in most business failures, and that appears to be the case here as well. Digg had its fair share of competitors, but most would probably credit Reddit for taking the spotlight away. According to data from comScore, Reddit surpassed Digg in traffic for the very first time in December of 2011. From there, it never looked back. But this hasn’t been a case of just barely edging out the competition. It’s been more like a continuous landslide victory. comScore’s findings reveal that Reddit has been putting a beat down on the opposition ever since in terms of unique visits and page views. With many of its loyal users jumping off the ship, it seems Digg lost the will to fight.

No Business Model

The one reason social networking will likely forever be a fragile industry is because many of its biggest players lack a viable business model. It’s been true with Facebook, Twitter, and Digg especially. Money isn’t everything, but in the business world, funding is vital to an organization’s very existence. When a company cannot demonstrate the ability to make money, the venture capitalists that are providing the financial support start to see them as a risky investment. Digg lost its supporters and was forced to go to the seller’s market. The other side to the lack of a business model is limited value. According to reports, the service once valued at $200 million sold for a measly $500,000.

Digg Killed Digg

We have seen some interesting accusations regarding who is responsible for putting Digg out of its misery, but in reality, there is no one to blame but Digg itself. The service fumbled on numerous occasions and with each mishap, further alienated its audience. It is another case of bad decisions and poor leadership, the two ingredients that have helped crumble the mightiest of corporations. Hopefully for Reddit, StumbleUpon, and other sites in this segment of the social space, Digg’s demise will serve as the blueprint of what not to do.

Author Bio: Abel is a writer, online marketing expert, and advocate for email marketing software company, Benchmark Email.

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