Digging Up the News
Kevin Rose was trying to improve the media, not reinvent it. But with Digg, that's exactly what he's doing.
By John Heilemann

(Business 2.0) – When I sat down with Kevin Rose in his loft-style offices south of Market Street in San Francisco, I must admit I felt a tingle of anticipation. It wasn't just that Rose was a founder of Digg.com, the "social news" website whose remarkable growth has made it one of the most buzzed-about startups around. Nor was it that Digg had reeled in a $2.8 million round of financing from an A-list assortment of investors including Greylock Partners, Omidyar Network, and Marc Andreessen. No, what set my pulse racing was the pair of labels attached to Rose in the press release announcing the financing: "media visionary" and "technology visionary." I mean, how often do you get to meet the next Nicholas Negroponte?

Alas, it was not to be. For one thing, Rose--a 29-year-old former Unix administrator and TechTV personality who looks uncannily like Rushmore star Jason Schwartzman--isn't the least bit pompous. For another, he isn't really a visionary. What Rose is instead is a canny synthesist: His brainchild, Digg, is essentially a mashup of Slashdot, MySpace, and Del.icio.us. Yet the fact that Digg isn't entirely original doesn't make it less interesting. In fact, Digg may prove more important than the services from which its genetic code was spliced together.

To his credit, Rose makes no bones about the sources that inspired him--especially Slashdot, the venerable community-driven tech news website. "I was a big fan," Rose explained, "but I didn't understand why they really weren't allowing their users to view all the submitted stories.... So my idea was to start a news website where you would give complete control to the community, a site where users could submit stories that would fall into a general queue, and if they were popular enough--if they got enough 'diggs' [user endorsements]--they would be promoted to the homepage for everyone to see."

Rose dreamed up Digg in the fall of 2004. With the help of two pals--coder Owen Byrne and Equinix founder Jay Adelson, now Digg's CEO--he had the service up and running in December 2004 and 12,000 registered users within four months. Then, last spring, when Paris Hilton's cell phone was hacked, someone close to the perpetrator posted a blog item about it to Digg, and the story quickly hit the homepage. "Yahoo and Google both indexed us that night," Rose recalled with a grin. "So the next morning, we were the No. 1 result in both search engines [on that topic]. For the next few days, the site was hammered so hard you pretty much couldn't use it."

Since then the hammering has only grown more fierce and voluminous: Today, Digg has more than 180,000 registered users and serves up 6 million pages every day. Along the way Rose has added features including RSS feeds that let users keep abreast of which stories friends (or Rose himself) are digging and a function called Digg Spy that monitors the rise and fall of stories in real time.

Rose believes that the popularity of Digg boils down to the way it taps into what's known (in the words of author James Surowiecki) as the wisdom of crowds. "People like the fact that it's a democratic approach to news," Rose said. "There's no handful of editors in a smoke-filled back room deciding which stories are important; the masses are deciding."

Rose and Adelson have ambitious plans. With 12 employees now on staff, they're racing to broaden the service's appeal. "We'll be creating other areas of content--world news, politics, entertainment, and so on," Rose explained. "Right now, it's hard-locked into a set of categories pertaining to tech, but in the future we're going to allow free-form tagging of information to let people define their own subcategories." (Thus the influence of Del.icio.us.) "Digg is also learning a lot about what its users are into," Rose said, "so it should be able to recommend stories based on what you've been digging and allow you to communicate with other people who have similar interests."

As Rose outlined his vision, I found my mind drifting once more to Negroponte. Back in the early days of the digital revolution, the founder of the MIT Media Lab advanced the concept of the Daily Me--a virtual newspaper customized by each reader to his personal tastes. At the time, the idea seemed radical; now Rose and his colleagues, with the help of RSS and other technologies for filtering and feeding, are making it a reality and pushing it even further along by marrying it to the wisdom of crowds. (Amusingly, when I mentioned Negroponte to Rose, he had no idea who he was. "I'd love to read some of his documents," Rose said. "Is he published?")

The schoolmarmish objection to Digg--as it was to the Daily Me--is that personalized news is bad for democracy, that it narrows the diet of readers to topics they're already interested in (all ice cream, no spinach) and allows them to ingest only analysis with which they're inclined to agree. Another objection is that crowds aren't actually all that wise, that as Digg expands into other realms of news, it's likely to take on the flavor of a supermarket tabloid. If Hilton's cell-phone hack was a hit among hard-core geeks, it's not hard to imagine a more mass-market homepage turning into all Brangelina, all the time.

The objections are fair but more or less irrelevant. With the proliferation of blogs, the world is being flooded with new sources of information and opinion. The culture of participation nurtured by the Web is destined to grow more rich and varied. And suspicion of the mainstream media, along with frustration over the opacity of how it decides what's important, is here to stay as well. These three trends provide fertile soil for services such as Digg. If traditional media refuse to pay attention, it will be to their detriment, as more transparent and participatory platforms usurp their position--not as gatherers of news but as aggregators and disseminators.

Not that Rose intends for Digg to restrict itself to news. Imagine being able, for example, to use Digg to explore the popularity of consumer products such as cell phones or plasma TVs--to be able, as Rose put it, "to drill down among your set of friends or the masses and see their opinions." Then imagine this capacity married to the recommendation-engine feature that Rose and his team are working on. In other words, Consumer Reports, look out.

Already profitable when it received its VC cash, Digg has yet to court advertisers as aggressively as it could. Meanwhile, not surprisingly, the company has caught the eye of more than one potential acquirer. (In January, rumors flew on the Web that Yahoo was about to buy it.) "Digg in my mind is only 10 percent complete," Rose said. "We're not really at the point where we want to sell, but that's not to say we're crazy either. If someone comes to the table and throws down a huge sum of money, it's like, OK--we'd just have to be sure it was the right fit."

Somehow I suspect that Rose will be facing this particular scenario sooner rather than later, especially if Digg continues to flourish alongside the acquisition fever that's currently gripping the Internet business. The company's success so far may be rooted in the wisdom of crowds, but in deciding whether to sell out, Rose may find himself guided by an even more powerful force, the invisible hand--the one that pushes entrepreneurs toward cashing in.

UNCOVERING A HIT FORMULA

Digg took elements from popular websites and combined them to create a site that is challenging established rivals.

Source: ComScore Media Metrix

John Heilemann wrote "Pride Before the Fall." His next book is "The Valley." He lives in Brooklyn.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.