What should Digg do?
I've been thinking a lot about Digg and the other social news services.
Start here: they have far more readers than writers.
I don't have access to the data, but I'm betting ten or twenty times as many people read the Digg list as post to it.
Which is just fine.
Second: there's no way they will ever make a profit from their readers. That's because
a. more and more will find the hotlists in places other than their site
b. people reading the hotlist are unlikely to be swayed by an ad.
Think about reading the Billboard charts or the Amazon bestseller list. That's a very goal-directed activity, and the goal isn't necessarily to find something that's NOT a bestseller. People skip the ads on the bestseller page, but read the ads in the classified section.
But that's just fine too.
Third: the Diggers, the posters, the surfers... these are very highly-leveraged people. Call them the Legion of Super Surfers. Okay, bad acronym, maybe not. Call them the league of the leading edge.
The leading edge has always been important. Now, though, since they have a megaphone, since Digg and the others are amplifying their movements, they are far, far more important than ever before.
And that's Digg's asset. They have aggregated the league.
So what now?
Get permission to fead the League tidbits about the future. The reason they are Diggers is that they like being first, they like discovering cool stuff and then sharing it. So organize that process and monetize it.
Here's what I would do (two alternatives)
1. Say to every Digger: here's our FirstLook RSS feed (or sign up by email). Every two days, we send you a link to an article, a new product, a political idea--whatever topic you tell us you love.
Then, go to the teeming masses of marketers out there and invite them to nominate their new ideas, their new posts, their new sites to your editor. The editor picks the ones that are good enough, that make the cut. Figure three or ten or a hundred a day, depending on the demand. Once demand goes up, charge $20 just to submit one, so the editor can hire a squadron of assistants.
Alert the marketers that have something worth of distribution. Let the others down easy. Now, let the ones that qualify bid against each other. High bidder gets first billing, top five bidders make the list.
Alert the 500 or the 5,000 or the 50,000 Diggers that signed up. They see a list of things that might be tomorrow's big news. They digg the ones they love. Marketers save millions and months. Digg makes a fair profit and becomes a key powerbroker in the launch of the new. Diggers who choose to get to see a commercial glimpse of tomorrow (the same way reporters choose to look at press releases from the right media outlets).
2. The other alternative could happen tomorrow. Build a Squidoo lens or a blog for Legion members. Figure out how to assemble a thousand or even 200 like-minded diggers. Have them sign up and give you their email address. Use the RSS feed of the lens to keep your members up to date. Now, instead of finding readers for your "ads", you find ads for your readers. Every day or two, your post goes out to your members. Every day or two, you make a hundred or a thousand or ten thousand dollars from someone who had a story worthy of being distributed.
Obviously, neither approach works if you sell out. Neither approach works the minute you stop representing the interests of the League. Take a lot from Zenith or Quasar to push some lame device and you fail.
It's pretty clear to me that this is the moment to build an asset like this one, one that could last for a long, long time (maybe even five years!).