Bad News for Digg – Valuation drops from $160m to $500k

It’s a sad day for Digg, the once super cool social bookmark site has dropped from a valuation of more than $160 million to the bargain basement price of $500,000. The buyer is New York technology development firm Betaworks, which is attempting to revive the news-sharing site that was outmaneuvered by Facebook and Twitter.

I’m not entirely surprised by this drop in value for the site. Back in 2006, Digg was the place to get news before anyone else; it was the first site I looked at in the mornings to see what happened while I was sleeping. And, I wasn’t the only one. Enough of us went there daily to help land Digg founder Kevin Rose  on the cover of BusinessWeek in 2006 with a $60 million valuation.

But, now I hardly ever go to the site anymore and yesterday, Digg confirmed it sold its brand, website and technology to Betaworks. The price is a pittance for a company that once raised $45 million from prominent investors including Facebook investor Greylock Partners, LinkedIn founder Reid Hoffman, and venture capitalist Marc Andreessen in just one week.
According to insiders, Digg received higher offers from bidders that included technology and publishing companies and start-ups but ultimately decided Betaworks had the best plan for reviving its brand.

Founded in 2004, Digg was once one of the most promising start-ups in Silicon Valley. Digg users would post links on the site’s home page, then others would vote on their choices, determining the prominence of the stories they posted.

“They were one of the first social media sites,” says Kristina Lerman, an assistant research professor at the University of Southern California who has studied Digg and other social-news sharing sites. “They introduced social components like having friends and followers.”

The site quickly rose to prominence, in part due to founder Kevin Rose, a former cable television talk show host, whose charm helped sell the concept to Internet tastemakers. In the fall of 2008, Digg raised nearly $29 million in venture capital from Greylock Partners, Highland Capital Partners and other financiers in an investment valuing the company at around $164 million, according to Dow Jones VentureSource.

Over the years, the company was rumored to be in negotiations to sell itself several times, including to Google in 2008 for a reported $200 million. The deal was never completed.

But the audience started to drift away in early 2010 when services such as Facebook and Twitter exploded in popularity, as users preferred getting article recommendations from their friends or people they followed. I know I stopped going to the site for news around 2009, pretty much the same time Twitter established itself as the source for instant news having given us the very first reports of Captain Sully’s brave water landing and Michael Jackson’s death.

A series of redesigns not well-received by users also hurt the company. A site relaunch in the summer of 2010 triggered a backlash, with most users saying they preferred the old Digg. By the end of 2010, Digg’s audience had fallen by more than half, according to ComScore.

Newer social-news website Reddit. also stole some of Digg’s thunder. Last December, Reddit drew more visitors than Digg for the first time, according to comScore, and since then it has maintained that lead.

In March of last year, Rose resigned from the company. He is now a venture capitalist with Google Ventures.

Betaworks intends to fold Digg into News.me Inc., a digital media start-up that Betaworks launched in April 2011. News.me sends users links to news articles that their connections on Twitter and Facebook are reading and talking about. News.me, which uses an iPad and iPhone app and daily email newsletter, has about 10 employees.

None of Digg’s remaining employees will join Betaworks as part of the acquisition. Chief Executive Matt Williams will join venture capital firm Andreessen Horowitz as an entrepreneur-in-residence. Betaworks CEO John Borthwick will become Digg’s new chief.

Sad day for a once super cool site. But, it will be interesting to see what Betaworks has in mind for Digg. I will keep y’all posted.

“Marketing” Agency Busted For Bribing Bloggers

Hamilton Nolan of Gawker told a story yesterday that will both entertain and enrage you; it sure did me.

It began when Hamilton received an email from a wanna-be marketing group called 43a. The agency claims they regularly bribe bloggers to “semi-naturally” include links to their “clients” and offered to pay Hamilton $175 for each link.

Clearly, this guy Bryan Clark of 43a has never read a single blog post ever written by Hamilton or he’d know that he’s the last blogger on earth who would ever accept a bribe for client coverage. Had Bryan read Hamilton’s previous work, he would also have known why Hamilton was so inquisitive about how it works, what they pay, which other bloggers have participated, what clients 43a represents and how the “marketing” agency gets around editors and their nit-picky standards of journalistic integrity.

Rather than paraphrase Hamilton, I suggest, you click on over and read through the stunning email exchanges he had with Bryan. It will truly blow your mind.

I would like to point out, that all of the bloggers Bryan claims to have bribed have adamantly denied the allegation. And, the “clients” 43a claims to represent, T-Mobile, Motorola and Dell, have all also denied ever working with, paying money to or even knowing this agency. In fact, Adam Brown of Dell is a friend of mine everyone knows he would never in a million years work with any agency that bribes bloggers. Adam is a stand-up guy if ever there was one and quite frankly, he is far too talented to even need to bribe a blogger.)

I am truly enraged by this story because this kind of garbage just sullies our profession. The good news is lousy marketing and PR practices always get called out. 43a tried to play with with the big boys and got burned as bloggers everywhere are sharing Hamilton’s email exchange.\

credit: Hamilton Nolan of Gawker

Wikipedia is Dying; Nobody Edits Anymore

We all know on Wikipedia, anyone can edit. The problem is, nobody wants to.

Wikipedia founder, Jimmy Wales made an announcement at this year’s Wikipedia conference: Nobody wants to edit Wikipedia anymore.

Wales later told the AP that the number of Wikipedia editors is slowly dwindling. “We are not replenishing our ranks,” he said, “it is not a crisis, but I consider it to be important.”

According to Wales a lot of the core Wikipedians have simply aged out, got married and found that they have better things to do with their time.

I’d personally add one more reason: Wikipedia makes it entirely too hard for people to become contributors/editors and when you do, your content (even content that fits within the MoS parameters of editorial content) is seemingly arbitrarily changed by admins without any rhyme or reason.

I used to be a Wikipedia editor and in many ways it was very useful. I spent much time adding my clients’ case studies to relevant topics, helping with their SEO while improving the validity of wiki content. But, when trying to help other clients become editors themselves, I often heard, “this is just too hard” and “they make it too difficult.” Or, “all of my hard work was erased for no reason.”

Now, I do think editing should be somewhat restrictive and shouldn’t be so easy that anyone can make any changes they want. And, I’m sure there were instances of my clients adding sales-speak to the site, which will get flagged faster than … well something that gets flagged quickly.

But, when you make the game so difficult that people give up, you can’t be surprised that no one wants to play with you anymore.

Today, Gawker said: Wikipedia needs to get cool again, somehow. When Wikipedia launched in the early naughts it was attractively subversive—it pissed off your teachers, journalists and any square over 40, basically. Idealistic young nerds flocked to the site with that early web 2.0 communitarian fervor. But new editors aren’t showing up at the same rate. After years at the top result on practically every Google search, Wikipedia has lost its urgency. Kids who were in 8th grade in 2004 have gone through their entire high school and college careers consulting (i.e. plagiarizing) Wikipedia; to them, Wikipedia is a dull black box—editing it seems just a bit more possible than making revisions to Pride and Prejudice.

Meanwhile, Twitter and Facebook have become the preferred sites of younger Internet users and Wales has been trying to incorporate some of those features into the site to keep younger users participating:

“The typical profile of a contributor is ‘a 26-year-old geeky male’ who moves on to other ventures, gets married and leaves the website,” Wales said. “Other contributors leave because, 10 years after the website was launched, there are fewer new entries to add.”

By March, Wikipedia had about 90,000 active contributors. The goal is to tack on another 5,000 by June of next year, said Sue Gardner, executive director of the nonprofit that runs the website.

Among its steps, Gardner said the site is expanding a program that encourages university professors to assign the writing of Wikipedia entries to their students, particularly in India, Brazil, Canada, Germany and Britain.

The website has also introduced a new feature called WikiLove aimed at keeping users engaged. Visitors to the website select a graphic icon — choices include kittens, stars and the Mediterranean dessert baklava — and send it with a message of appreciation to a page contributor as encouragement. “It’s like a ‘like’ on Facebook,” Wales said.

Let me know what you think. Are you a Wikipedia editor? Do you want to become one? Or, should the site put its glory days behind it?

British Newspaper Forgot To Write a Headline

A better sign of the times I’ve never seen. The British newspaper The Times and Citizen forgot to replace filler text with a headline on their front page!

 

 

The Connections Between Social Media & Search

You’ve heard me say this before, but it bears repeating again and again: the single greatest selling point for a social media campaign is that SM and SEO go hand in hand. Every single tweet, every Facebook page, every YouTube comment – every thing you say within social media channels is recognized by search engines. Therefore, the right SM campaign can allow you to “own” search rankings. 

Today, I want to take this concept a step further and look not just at the result of social media on search returns, but also the impact social media has on search behavior.

A company called GroupM released a study that details the interplay between social media and search, specifically, brand term search volume and paid search click through rates as well as evidence showing how social media influences consumer intent and search behavior.

The study looked at correlations between social media exposure and search behavior and went on for a period of 3 months. It included a number of different searches, including consumer packaged goods, automotive and telecommunications. The people studied were also separated into three groups, consumers exposed only to a brand’s paid search, consumers exposed to social media relevant to a brand’s category, and consumers exposed to influenced social media specific to a brand.Here are some highlights.

- Consumers exposed to a brand’s influenced social media and paid search are 2.8x more likely to search for that brand’s products

- There was a 50% CTR increase in paid search when consumers were exposed to both influenced social media and paid search

- In organic search, consumers searching on brand product terms who have been exposed to a brand’s social marketing campaign are 2.4 times more likely to click on organic links leading to the advertiser’s site than the average user seeing a brand’s paid search ad alone

It’s clear that social media and search are interconnected. So, as you examine SM channels and campaigns, it’s important to consider the natural search paths that will lead customers to your brand and the natural paths that your own strategies will create for the next search. The right campaign will build content around that path from impulse to connection and back again, driving more content, communicating more messages and ultimately, allowing the brand to own returns on customer thinking.

 

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