“Just wanted to give everyone some insight into some of the changes we’ve been making this week. As we’ve talked about in the past, Digg’s promotional algorithm ensures that the most popular content dugg by a diverse, unique group of diggers reaches the home page. Our goal is to give each person a fair chance of getting their submission promoted to the home page,” wrote Kevin Rose on Digg the Blog.

First you get the Digg credibility, then you get the Digg friends, then you get the Digg power. The Digg Mafia, also known as the top users of Digg that generates 30%-50% of Digg’s front page content, is not amused with the new algorithm. The new algorithm gives the Digg Mafia less power.

And because of this, they wrote an open letter to the Digg team as noted by ValleyWag. Besides the fact that Digg has secret editors and auto-buries, the top users feel that Digg has problems with:
1.) Lack of communication and disregard for the Digg community
2.) Unexplained and unacknowledged banning of top users
3.) Lack of transparency - Digg only shows you the stories that people have dugg, but not the ones that are buried.
4.) The auto-bury list - For months, dozens of sites have been on an auto-bury list, often with no explanation whatsoever.
5.) Repeated and flagrant disrespect of its top users

Top Digg users have demonstrated how much power they have had in the past. It will be interesting to see who responds first, Digg management or The Digg Mafia.

Apple.com 1998

Apple.com 2008

Google 1998

Google 2008

Yahoo! 1998

Yahoo! 2008

Netscape.com 1998

Netscape.com 2008

Microsoft.com 1998

Microsoft.com 2008

Digg.com 1998

Digg.com 2008

Revision3 has recently unleashed a new show within their network of programming called Digg Reel.  Digg Reel unveils what some of the top video picks popular enough to make it to the homepage within Digg.com.  The TV show launched around 9PM Pacific Time and at the same time, Kevin Rose was hosting a party for his instant messaging and file-sharing software called Pownce.

Digg Reel is hosted by Jessica Corbin and the popular videos are showed within the show’s episode, thus allowing Digg users not having to surf over to the site to watch it themselves.  First the video is shown, Corbin says a few catch-lines, and then displays comments from a few Digg users.

I watched the first episode and some of the videos that were featured included a bunny opening an envelope, Guns and Roses’ Sweet Child of Mine-Indian version, and Jon Stewart reacting to Hillary Clinton’s crying (or lack thereof).

VH1 and Atom Films’ came up with a similar program a couple years, but their program wasn’t backed by a strong community.  I do not think that their show is aired on TV anymore.  MTV bought Atom Films in August 2006.

Revision3 Corporation is a network of tech-related web program shows.  Some of the most notable shows on the site include Diggnation and The GigaOm Show.  The company was started by Jay Adelson, Kevin Rose, and David Pranger.  These three had prior experience working at TechTV/4.

[Information Source: ValleyWag]

Thomas L. Friedman, a contributor to The New York Times and author of best-selling book, The World is Flat wrote that there are “10 flatteners” that contributed to mass-globalization. The 10 flatteners are:
1.) Collapse of Berlin Wall (11/9/1989) - The end of the Cold War allowed those on the other side to join mainstream economics
2.) Netscape’s IPO (8/9/1995) - Netscape’s IPO was offered at $28 per share, but raised to $75 on the first day of trading. The web became hot from that point on and people saw money in it… lots of money.
3.) Workflow software - Machines ability to talk to other machines
4.) Open sourcing - Collaboration of online projects (such as Wikipedia)
5.) Outsourcing - The ability for companies to split services into components across the globe, saving money and increasing production possibilities
6.) Offshoring - Manufacturing outsourcing
7.) Supply chaining - Streamlining sales, distribution, and shipping
8.) Insourcing - When a company’s employees perform services for other companies (like UPS).
9.) In-forming - The ability to find information about so many things with services like Google
10) “The Steroids” - mobile phones, iPods, PDAs, IM, and VoIP

When Netscape had their IPO I was 12 years old and often times found myself using their browser to get on Yahoo.com and search for the information I needed to put together middle school assignments. Yahoo!’s creation and Netscape’s IPO msut have worked out harmoniously because that is the only web site my friends and I knew and we always used Netscape. Without the mainstream use of Netscape, who knows how big the Internet would be today? Internet Explorer’s existence would certainly be questionable since Bill Gates rounded up his Microsoft cadets and made sure they had a way to compete against Netscape.

In January 1998, Netscape started the open source Mozilla project that is now especially known for producing popular browser, Firefox. Based on my observations, I have seen Apple and Google endorsing Firefox more than Internet Explorer.

On November 24, 1998, America Online acquired Netscape for $4.2 billion through a tax-free stock-swap. This acquisition gave a way for America Online to become less dependent on Microsoft’s Internet Explorer. Internet Explorer was deeply integrated throughout America Online’s ISP portal. In May 2003, Microsoft paid Netscape $750 million to settle a monopoly lawsuit and also gave AOL the rights to distribute Internet Explorer for 7 years royalty-free. About 2 months later, AOL’s parent company, Time Warner disbanded Netscape and laid off most programmers.

Red Hat, the company that produced the Linux operating system bought a large portion of Netscape’s Enterprise Suite in 2004. DevEdge, Netscape’s popular development web site that contained popular articles were republished on Mozilla’s web site. And since 2003, Netscape put together a new programming staff that would keep their open source browser updated and was supported by AOL.

One of Netscape’s latest projects was Propeller. Propeller was a social news website that was similar to Digg in functionality. Jason Calacanis, a Sequoia Capital EIA and founder of Mahalo, attempted to poach top users from Digg, Reddit, Newsvite, and Flickr to speed up the popularity of Propeller. This caused a slight animosity between Jason Calacanis and Kevin Rose (founder of Digg), but they seemed to have resolved their issues on The GigaOm Show (powered by Revision3). Calacanis also co-founded Weblogs Inc., a network of blogs that AOL bought for roughly $25 million.

About a week ago, Tom Drapeau blogged that Netscape would officially halt security updates for Netscape. Further versions of the browser will stop being made because the time-cost tradeoff for AOL to support Mozilla is not feasible. AOL has to compete with some of the search powerhouses including Google, Microsoft, Ask.com, and Yahoo! Old versions of Netscape will be available in a Netscape Archive link. The actual web site, Netscape.com will be available as a general Internet portal.

It is always sad to see a part of Internet history struggle to compete with today’s hypercompetitive markets. Netscape was the first mainstream Internet browser and it will definetely go into the history books.

[image credit: Wikipedia]

DIGG
The acquisitions that Yahoo!, Google, Microsoft, and eBay have made over the last year has made
things a lot more interesting. Between these 4 companies, they have acquired social networks and VoIP technologies that have banking companies swooning just like they were in the late 90’s and early 2000’s.

During Digg’s tenure as a Web 2.0 company, they have received over $10 million in funding. Kevin Rose, the founder of Digg has also been working on a couple of other start-ups, Revision3 and Pownce. Rumor has it that Digg CEO, Jay Adelson has hired Allen and Company, an investment banking firm to broker a deal worth $300 million or more in the form of an acquisition. Rumor also has is that InterActivCorp is one of the leading interested parties in an acquisition.

In my opinion, I think Digg is great property for an acquisition. But for the amount that they are looking for seems a little stretched. I think this because I feel that Digg users seem rather unstable and are constantly being tampered with. In the last couple of years, Digg has removed the listing of their top users, created a new social network that involves “Shouting Out” stories to other users (which seems more like spam to me), and even saw a major user revolt late April/early May 2007 (remember 09-f9-11-02-9d-74-e3-5b-d8-41-56-c5-63-56…. controversy?). Digg gives a lot of control to the end user which can be a strength, but can also be a major weakness. Digg users tend to be sensitive and over-express it when they feel like Kevin Rose/ Digg isn’t acting like “one of the people.”

Will Digg see an acquisition soon? So far it’s only speculation since there have been multiple opportunities for Digg to become acquired.

BEBO
Social network, Bebo is also rumored to have hired a bank in order to either raise a substantial amount of funding or for an acquisition. Bebo reports that they have more than 40 million total users, of which 12 million are active in the UK and Ireland. Traffic has doubled since last year for Bebo. I picked up the rumor from VentureBeat.

Bebo is also working with Google on OpenSocial, an open-source developer platform to let third parties create applications on their own social network, similar to Facebook Applications. Bebo has reportedly seen itself being courted for an acquisition before, but none that have gauged its interest of a price-tag above $1 billion.

Social networks are a hot commodity, but with other social networks like MySpace, Friendster, Facebook, Hi5, and Orkut, the market is just becoming more saturated. Brokering such a deal through a bank will be challeging given today’s market.

“I feel like I’m taking crazy pills! I invented the piano key necktie, I invented it!” yelled Mugatu at the audience of his Derelicte campaign centered around professional male model, Derek Zoolander. For some reason, reading about Eric Schmidt’s reaction on whether there is a Google phone reminded me of the aforementioned scene from Zoolander. When questioned about the phone, Schmidt said “As you know I’m on the board of Apple. I’m using the iPhone.” Overbidding for tech companies apparently upsets Schmidt too, but suave Sergey Brin calms him down [Source: Forbes]. If the Governator heard one of the highest paid CEOs in California talks like this, I have no doubt in my mind that Schmidt would be called a girlie man for such a comment and the Governator would then proceed to pump him up.

The purpose of my blog post however isn’t to stigamatize Eric Schmidt though. It is to question the purpose of these exclusive advertisement deals. When I think of the word exclusive, I believe that it means “not shared” or “not divided” with others. This is why Google paid $900 million for exclusive MySpace advertising rights and $1 billion for powering AOL search. Google also has an exclusive advertising partnership with CNN and Friendster as well. A lot of Google’s money is also going towards the Mozilla Foundation to power browsers such as FireFox. That is a lot of partnerships Google has and a lot of money has been paid to attain such partnerships.

Therefore Microsoft needed this Facebook deal and needs the deal that it has with Digg… “We’ve signed on Microsoft as our new partner to sell and serve the ads on Digg. It’s a deal similar to the one Facebook signed with Microsoft last year,” wrote Kevin Rose on the Digg Blog in July 2007.

I saw Google Ads on Digg today though. And this makes me question the word exclusive. Is Digg being neglected by Microsoft and this is why Google Ads were not removed yet? Is it a simple mistake on Digg developer’s part? Did the Microsoft-Digg deal actually happen? And what is with all these damn Digg shouts I’m getting?! Why is it that I’m getting poked, shouted at, and superpoked by all the web companies in Silicon Valley for crying out loud?

Information Source:
[1] Barron’s Tech Trade Daily: Google Analyst Day: CEO Eric Schmidt

Why did Facebook grow so fast? Page views!! How did Facebook get so many page views initially? E-mail notifications!! What does Digg have now? E-mail notifications!! That is correct ladies and gentlemen: you will now see that Digg will start receiving a lot more page views, hence a higher Alexa ranking now that they have e-mail notifications built around their newly formed social network. K. Rose should have thought of this idea earlier if he wanted to get himself to join the billionaire’s club like M. Zuckerberg. E-mail notifications may start getting played out now though since people get tons of event spam from Facebook the more that users join groups.

Note to Digg users: keep watching Digg’s Alexa ranking. Here’s a video demo of their product’s new services:
[youtube]http://www.youtube.com/watch?v=y-vo9rfwwuA[/youtube]

“Visitors to Netscape.com will see a more traditional news experience very soon. Don’t worry, the social news site isn’t going away! We will keep you updated on where you will be able to find the social news site as we get closer to making the switch,” wrote Tom Drapeau on the Netscape Blog.

Jason Calacanis is often associated for Netscape turning into a Digg clone and is often seen as Kevin Rose’s arch-enemy, but did not seem to act that way on the second episode of the GigaOM show.  Calacanis was also known for hiring top users of social bookmarking sites Digg, Reddit, Newsvine, Flickr, etc. and having them shift over to Netscape.

The new Netscape homepage will look like netscape.aol.com, but Netscape’s social bookmarking platform hasn’t found a new URL home yet.  Calacanis no longer works as a General Manager at Netscape, but is instead invested heavily in his search engine start-up, Mahalo.com.

Turf wars don’t just happen in the streets.  They also happen in Valleys.  For example, Kevin Rose’s Digg users saw Rose as a victim to theft from Jason Calacanis’ influence on the redesign of Netscape.  However, Kevin and Jason clearly presented mutual respect for each other on the last episode of The GigaOM Show.

If I were to take anything away useful from the entire episode, I would say this would this dialogue would be it:
Om: “Are you two Facebook friends or no?”
Rose: “Yeah, we are.”
Joyce: “Top friends?”
Rose: “Uh, I haven’t added that stupid Top Friends application, I refuse to do it.”

In this episode, I was happy to see that I wasn’t the only tech-savvy person annoyed by some of the useless applications appearing on Facebook.  Another part of the episode I liked is when Om asked Calacanis why nobody likes him.  I didn’t envision Om to be so blunt.  I think I’m actually starting to like The GigaOM show better than Diggnation already.