The Rise: Kevin Rose kickstarted Digg in 2004, and in less than two years, it was one of the most popular hubs for teens and young adults to crawl and discover news links. One of Digg's features proved to be its reason d'etre: users could vote up, or "digg," or vote down, (read: "bury") news links, which could potentially bring it to Digg's front page for utmost exposure or render it irrelevant. At its best, Digg.com brought in more than 236 million visitors a year.
The Fall: In August 2010, the content curation site rolled out a controversial site redesign called v4, or "Version 4," that initially gave more power to news publishers and took away user features like the "bury" button and "Favorites" and reduced the number of news categories. The backlash was swift. Visitor traffic plummeted 30% within 30 days of the redesign, while competitor Reddit saw its own traffic explode, likely due in no small part to disgruntled Digg defectors. The downward traffic spiral also likely contributed to the company's most recently round of layoffs: 25 employees, or roughly 37% of its staff, last October.
The Plan: Swap out interim CEO Rose, who replaced one-time leader Jay Adelson, with 11-year Amazon vet Matt Williams. Also, rectify some of v4's most grievous issues by returning some of the aforementioned Digg feature to users.
The Challenge: Revive Digg's fortunes by tweaking v4 to a point where current Digg users will be happy and persuade Reddit defectors to give Digg another look, a major challenge in the notoriously fickle consumer market. There's also the issue of money. With some $40 million in funding from investors like Greylock Partners, Highland Capital Partners and Marc Andreesen, Digg is still not turning a profit.
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