One way Digg can help, Adelson said, is by helping these news sites with their advertising using techniques similar to the ones Digg has implemented. Adelson said that Digg Ads, the company’s recently launched ad product that lets users vote on the advertising they’re seeing, has been performing very well, generating high click through rates that the company “wasn’t expecting to see”. He later remarked that these ads were getting up to 100 times the click through rates that standard banner and text ads generate.

Adelson also said that the company has shifted gears a bit since the downturn hit last year — it’s now focused on growth rather than monetization. Adelson said that he’s “feeling good” that Digg is going to be profitable, and that reaching that goal is “not the problem any more”.

The interview closed out with a question about Digg’s future as an IPO candidate. Adelson says that he “has to go public at some point” both to please investors and to help out Digg’s employees, but that the time for that hasn’t come yet. However, Adelson did strongly hint that we’ll likely see Digg go international as the site looks to capitalize on the fact that 40% of its users are abroad despite the fact that Digg is only available in English.

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Now, obviously, this link will be clearly labeled as “sponsored,” but that shouldn’t make it that much less of an enticing opportunity for some individuals who want to drive traffic to their site. Reddit says it sees anywhere from a 2% to a 10% click-through-rate on the ads that run in this area. At the very least, this should mean thousands of hits coming to your site that wouldn’t otherwise get.

So what’s the catch? The only catch is money. As long as you’re willing to pay the minimum of $20 a day, Reddit will enter you into a pool with everyone else willing to pay to determine how much face time you’ll get on the homepage. For example, if the total bids for the day equal $200, and you bid the minimum $20, you’ll get 10% of the day in this ad slot. It seems very likely that the daily bids are going to be quite a bit more than that, so $20 probably isn’t going to buy you much, but still, it will get you something.

With this beta, there won’t be the ability to target specific Reddits (the Politics Reddit, for example), but the plan is to eventually offer that option to better match individual advertisers with the audience they are trying to reach.

Adding your own self-serve ad is as easy as can be. Once you’re accepted into the beta, you simply fill out a title for you link, enter the URL, put in the duration that you wish to run your campaign, optionally disable comments, put in your bid amount, and then upload an image (if you choose). You then pay by entering your credit card information into a form.

What’s great is that just like regular Reddit items, users will be able to vote up or down on your ad, which means that if your content actually is good, you can even appear on the homepage for longer than you’ve paid for.

The company notes that users have tried to game the system for years attempting to get traffic, so this is a logical extension to allow them to pay to get it. It officially unveiled sponsored links for advertisers (big name ones) in January. Reddit’s main competitor, Digg, also has a advertising voting system, but so far, it’s only open to Digg’s advertising partners, not anyone willing to pay. Assuming they put guidelines in place (which Reddit has), it’s not hard to see this type of model eventually making its way to Digg as well.

Reddit’s founders, Steve Huffman and Alexis Ohanian, recently left the company three years to the day after Condé Nast purchased them. But they’re still clearly involved, as we spoke with Ohanian about this new launch, and he seems pretty excited about it.

As a part of the launch, Reddit has given us some invites to give to TechCrunch readers to check out the self-serve advertising system. The first 50 people to email MArrington [at] reddit.com will receive the invites.

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a lot of the shine has come off Digg. And while it still drives a tremendous amount of traffic, it’s amazing to see just how completely it has been eclipsed by Twitter, which in turn is still just a drop in the Facebook bucket.

Comscore worldwide data says Digg, Twitter and Facebook have 32 million, 58 million and 411 million unique monthly visitors (September 2009), respectively. Google Trends says much the same thing, but the growth over time is fascinating visually. We started with Digg, then added Twitter, and then added Facebook. In the end, Digg and Twitter are just footnote blips in the chart.

About a third of all Internet users worldwide visited Facebook in September 2009, says Comscore. A year ago it was 17%. And what about Digg? They grew from 15 million worldwide unique visitors a year ago to 32 million today. And they tripled page views to 171 million. So it’s not really about Digg doing anything wrong. They just pale in comparison to the guys currently in the spotlight – Twitter and Facebook.

If you could only use one service, which one would you choose? I’d be unhappy about the forced decision, but I’d go with Twitter, even with all its flaws.

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Hollars is part of Garlinghouse’s old team at Yahoo, and left the company shortly after Garlinghouse did to take over PR and communications at Digg. She joins AOL later this month.

“This is more about working with Brad again, and nothing about Digg,” she told us in a phone interview this morning, adding that she’s excited about the turnaround opportunity at AOL. She joins AOL as senior director of corporate communications, reporting to both Garlinghouse and EVP Corporate Communications Tricia Primrose.

Digg’s looking for Hollars’ replacement immediately. So if you want be the person to handle all corporate communications and Kevin Rose babysitting duties at Digg, let them know.

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Last week we posted a hazy screenshot of a new Digg voting feature called Digg Trends. It launches today.

The new feature shows an upcoming/trending story at the very top of the Digg home page. These are stories that are popular but haven’t yet made the top stories list. Users vote on whether or not they think the story should go to the top.

Digg says the goal is to put high activity stories in front of the community.

We’ve also heard that users’ predictive abilities will be tracked. Meaning if you vote a story up and it eventually hits the home page, you get additional authority of some kind.

Because there’s so much that happens beneath the surface of Digg, we’ve been working on new ways to expose the most interesting stories to more people. Today we’re launching a new homepage voting experiment called Digg Trends which will surface certain highly active stories as they’re trending to Digg’s homepage so people can vote on whether or not they feel the story actually belongs there.
How does it work? Digg Trends identifies and highlights upcoming stories that have a high volume of activity (think Diggs, comments, favorites, shares, etc.). When we detect a new trending story, it will appear on the homepage for ten minutes. Based on the Digg and bury activity in those ten minutes the story will either become popular or not. To make it easy to follow the action, we’ve setup a Twitter account to tweet out when a new Digg Trend is up for voting on the homepage. Here’s an example of what a Digg Trend might look like:

The goal of Digg Trends is to put high activity stories in front of the community quickly and to present a fun new way for people to express whether they like the story or not. We only show the most basic information for each story so as to ensure that voting is as unbiased as possible.

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When we intially wrote about the service (remember, very early on in the realtime search phenomenon), we noted that the presentation of results was impressive, but the results themselves were utterly dominated by Twitter. That really shouldn’t have been all that surprising considering Twitter’s popularity in the space. But the service has since added some new features to make it more robust.

You’ll notice that when you do a search, there is a clean, two-column layout. On the left, popular shared items appear. These can be links shared on Twitter, Digg items, etc. You can also filter this content by videos, links, and images. On the right, you’ll see the live-updating items from around the web. The majority are still coming in from Twitter, but there are plenty of results from places like Delicious and Digg mixed in as well. These two columns have been swapped since when we first covered the service, and the “Your Searches” column has been removed and place in the top bar.

More importantly, Scoopler has added an entirely new top area to break searches up into categories. Scoopler is calling the feature “Realtime Channels,” and co-founder AJ Asver describes it as, “like Digg’s categories but updated in realtime. They show the hottest tweets, links, videos and images in News, Business, Technology, Politics etc.  The idea is to drive more search queries by suggesting what people should search for.”

Makes sense. And the results are pretty solid. For example, I just clicked on the Entertainment channel and I see the live posts are being populated with talk about things like the new Michael Jackson movie and also the new Avatar trailer. There is also a constantly updating area along the top of the page to show you the hottest topics being talked about in realtime around the web.

But perhaps the best feature of Scoopler remains the “peek” option. This allows you to quickly see the content being linked to through tweets and Digg results in an overlay without having to leave Scoopler. The service also has little picture thumbnails that get inserted into the stream for things like Flickr pictures.

Scoopler’s seed round has attracted investors such as Ron Conway, (Bebo co-founder) Michael Birch, Avalon Ventures, and XG Ventures. Though the amount of the round wasn’t officially disclosed, we hear it’s in the $500,000 to $1 million range.

Speaking of realtime, don’t forget our second Realtime CrunchUp taking place on November 20.

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So what is it? It’s not the “Real Time Digg” relaunch that will integrate data from Twitter and other sources. Instead, we believe it is an experimental feature Digg will try out that encourages users to vote on whether a particular upcoming story should make it to the homepage or not.

Digg isn’t talking, so we don’t know much else. The 3/25 numbers on the left are a counter to show how much longer the story will remain on the home page (3 minutes, 25 seconds, based on us squinting at a blow up). It’s notable that users are asked to vote a story up or down without seeing comments or how others have voted.

The identity of the hand is also a mystery. More on this when it launches.

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What does TweetMeme do? They offer other sites a “retweet” button that makes it easy for readers to send story links to Twitter. We use it on all our sites, you can see it on the top right of this post. They also have analytics around tweets sent via the service, and a home page that shows the most retweeted Tweets at any given time. It competes with Digg, TechMeme, Google News and other news aggregators to show breaking news.

But is TweetMeme really so big? The short answer is no.

Comscore tracks 721,000 worldwide monthly unique visitors to TweetMeme. Quantcast says the number is more like 2.4 million. Google Trends barely registers TweetMeme against URL shortener service Bit.ly, which is similar to TweetMeme in some ways.

We believe Compete is simply counting all those javascript widgets that sites like us include on their stories. Which means it’s basically aggregating all of the traffic stats from sites that use TweetMeme. Not so useful.

Why This Matters

Everyone is trying to take real time Twitter data and massage it into a useful, filtered news stream. Bit.ly has a new product on the way called Bit.ly Now. Digg is rebuilding the service from the ground up to take advantage of Twitter data in figuring out what’s hot sooner.

If TweetMeme is really drawing that much traffic, it puts them ahead of Bit.ly and near Digg in total traffic. And that makes them a third contender in an already crowded space.

In the upcoming war between Bit.ly and Digg (and maybe TweetMeme), what matters, besides access to Twitter’s data flow, is the total traffic base to start things off. The ability to index and categorize links on the fly is also important, and all of these companies are working on ways to properly analyze data in milliseconds, which is hard to do properly at scale.

A lot is going to happen in this space in the near future.

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Since I wasn’t able to see the ads before, I wondered if the actual Digg content portion of the ad would link back to the sponsor or to the actual story. Not only does it link back to the story’s permalink page, but it routes it through a DoubleClick referral. So yes, Digg is keeping track of all of these clicks (though I’m told that right now the ads are on a CPM basis), while users are being sent to content that quite likely do actually want to go to. Win-win.

As you can see in the first such ad, for the new Warner Brothers film Where The Wild Things Are, the movie studio picked three previously popular stories on Digg about the movie. Each already had several hundred diggs before the studio wrapped it in the ad unit. One of Digg’s weaknesses is that once a story is off the main homepage, the likelihood that anyone is ever going to see it again goes way, way down. But this is a way for Digg to surface older content, while giving them a huge incentive to do so: Advertiser money.

Naturally, the ad unit also features a big graphic for the film as well. Clicking on this area goes to the movie’s website, just as you’d expect from a normal online ad.

While Google has made billions off of its contextual text link ads, overall advertising on the Internet remains a tough nut for many sites to crack. The simple fact is that some of the Google search result sponsored links aside, many users probably don’t really want to click on advertisements, and only do either by accident, or when they’re tricked (into thinking it’s content, or a game, or that they can win something free, or whatever). That Digg has figured out a way to get paid for what its users already click on, is very interesting.

To be clear, these ads are not the same as the sponsored Digg Ads that appear in the stream of stories. Those feature content that sponsors place for users to vote on. These new ads feature content that has already been submitted to the site by other users, not the sponsor.

The next question is, what happens if Digg strikes some deals to place these types of ads on other sites? Would users click on them, recognizing the Digg branding and realizing that they might actually like to see that content? Would advertisers still pay for that on a massive scale? That could be a billion dollar question.

Update: We were just told that for right now these ads are on a CPM basis, while the other Digg ads are CPC. Still, with Digg (by way of DoubleClick) keeping track of these clicks, they could very easily flip the switch and do CPC, assuming the advertisers played along with it, of course.

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This wasn’t exactly an acquisition, though, because Digg didn’t pay anything for the site. “The data became very useful for Digg,” says our source, and it was awkward keeping it outside of the company.

Digg has long been planning to launch a more real time version of the site, and we’ve speculated that Digg will soon surface new top stories based at least partially on stuff becoming popular on Twitter and other similar services. WeFollow gives Digg data on who the top Twitter users are for various categories.

WeFollow Relaunch:

WeFollow is also changing the way it ranks users. Currently it’s based only on total follower counts on Twitter. In the next day or so, though, WeFollow will change its algorithm and give more weight to users who tag themselves properly, and then have followers who have also tagged themselves similarly. For examply, if TechCrunch is tagged “startups” and a lot of people following TechCrunch have also tagged themselves startups, that gives a lot more weight to our account in that category. This goal is to reduce spam and give better data.

Below are screenshots of the new, yet to be launched service. The top shows the SEO tag by number of followers, the current way WeFollow ranks users. The bottom shows ranking by influence. Matt Cutts jumps to the top of the list, even though he’s only no. 8 in overall followers.

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Digg is testing a new type of advertisement on its site that basically surfaces old content submitted to Digg that is relevant to certain advertisers. So, as you can see in the example below, if Norton wants to advertise its new security software, it can find a few old Digg items related to Internet security and put them in the ad box along with their banner. This not only advertises their product, but gives users something potentially useful to click on.

The whole ad area is sponsored by the advertising company, but it’s not clear if clicking on one of the Digg stories in the ad space takes you to that actual story, and more importantly, if the advertiser is actually paying for all of those clicks. If so, that seems like a great deal for Digg. Regardless, this seems like a good way to build brand awareness through content that Digg users have already found useful by themselves.

One thing I’ve been thinking about recently is that while Digg is full of interesting information, the lifespan of that information is very short. Once a story disappears from the homepage, the liklihood that anyone is going to see it again is very small. Digg has some methods to surface really popular items again, such as the “Top In” areas, but there’s plenty of information that is not a top item on Digg for whatever reason, but would still be interesting to some users to see again. This is one potential way of surfacing such information and making money for doing it.

Digg notes that only a small percentage of users will see these ads for now. These are not the same as its Digg Ads platform, which asks users to vote on actual advertisements.

It’s also worth noting that advertisers are not allowed to submit their own content to use in these ads. Any content used has to have been already submitted to Digg, though it doesn’t necessarily have had to have been on the homepage.

[photo: TriStar pictures]

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In a post today, Digg’s VP of Engineering, John Quinn, talks about what Digg is doing to try and make the site faster. This includes moving static resources like CSS and JavaScript to Content Delivery Networks (CDNs), and switching to higher performance distributed databases. But the one of the biggest changes is something so small, that it’s kind of humorous Digg didn’t do it a long time ago.

Today, the service removed the tiny 16 pixel user icons that used to appear on the main page. The funny part is that they were so small, that you will barely even notice they’re gone. And thanks to this tiny move, they are “reducing HTTP requests to Digg for a warm cache load by around 75%,” Quinn notes.

To be clear, Digg hasn’t killed off recognition for users who submit stories that make the front page, but only their names are listed now instead of their avatars and names. On the Digg story page, you will still see the (larger) avatar.

Quinn notes that this is just the first of many speed initiative Digg has planned for the coming months, and notes that they “will result in order-of-magnitude speed-ups for many use cases.”

Most users put pressure on services for new features, but the trend of speed over bloat is a good one. Facebook is going lite(r) (though sharing speed remains an issue), Google is going faster, and even the latest version of OS X is all about optimization. Speed, speed, speed.

[photo: Paramount Pictures]

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Trammell is the latest in a series of long-time employees to leave Digg in recent months. In May, former lead architect Joe Stump announced he was leaving to do a new mobile location startup (now called SimpleGeo) with former SocialThing founder Matt Galligan. A couple of weeks ago, Digg’s design lead Daniel Burka, announced he would be joined Tiny Speck, the new social gaming startup led by former Flickr co-founder Stewart Butterfield.

Despite the loses, Digg still has no real peer in terms of size in the social news space. Founder Kevin Rose recently spoke with Sarah Lacy backstage at TechCrunch50 about what is going right with Digg and some plans for the future. Notably, Sarah asked about if upcoming changes will make Digg more of a Twitter competitor, to which Rose replied that he didn’t think so. Instead, he wants to leverage Twitter to spread Digg’s stories more, and to bring Twitter users into the Digg experience. Trammell, it seems, should be able to help ease that transition if Twitter feels the same way.

Trammell sounds particularly enthusiastic about his new gig:

I’ll be working with a new set of folks I admire (Doug Bowman, for instance) on a site that is changing the way the world communicates. Did I mention I’m excited? ‘Cause I am.

Trammell notes that despite his new job, he will continue to advise Digg on user research. Meanwhile, Twitter is rapidly approaching 100 employees.

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Next month, Burka (pictured) will begin work at Tiny Speck, the new project started by a group of former high level Flickr employees, including Flickr co-founder Stewart Butterfield and former Flickr head of engineering, Cal Henderson. Still not much is known about Tiny Speck, but it’s expected to be some sort of social gaming project.

And Burka’s hiring makes sense; as we reported in July, the company was looking to hire creative and design talent, which clearly Burka is. While the project is based in Vancouver (also where Flickr was started), Burka will be staying in San Francisco, along with several other Tiny Speck team members, including Henderson, Burka notes in a tweet.

Meanwhile, Digg should be in good hands with Kalmikoff. One month ago, he resigned as the Chief Creative Officer of skinnyCorp/Threadless where he had worked for 7 years. He had been planning on taking an extended period of time off, but felt he couldn’t pass up the Digg opportunity, he writes today on his blog.

Kalmikoff didn’t disclose any plans for Digg yet, but it will be interesting to see if the site undergoes a substantial redesign under him. While Digg has undergone several facelifts throughtout the years, the overall design of the Digg button followed by the story headline has remained in tact. Burka is the one who designed the Digg button you now see everywhere on the web.

Threadless has a great design too, but it’s definitely different from Digg.

Burka was a recipient of a 2009 TechFellow Award for Product Design and Marketing.

[photo: flickr/laughing squid]

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This video is longer than most of our behind-the-scenes glimpses, but we covered a lot of territory. Rose tells us the single most important product move Digg has made in the last year, whether his company is worried about the Twitter threat, what’s coming next for Digg, his favorite company that launched today (HINT: CitySourced founders may have a potential angel investor), and whether or not starting Pownce was a mistake.

Video is on the jump.

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Sure, all spammer who submit something to Digg hope that it hits the frontpage and brings a rush of traffic. But more important to them are the links associated with Digg. If a story is popular on Digg, it will also likely garner quite a few links back to it. But even if it doesn’t become popular, the link coming from Digg itself gives some weight to the spammy URL in a search engine crawler’s eyes.

Digg using nofollow has been a subject of debate since at least 2007, when the service was exploding with popularity. Around that time, Wikipedia decided to use nofollow for all of its outbound links. But what’s interesting here is that Digg isn’t adding nofollow to all of its links, and instead is only doing it for the untrusted ones.

“This work was done in consultation with leading experts from the SEO/SEM and link spam fields, in an effort to lookout for the interests of content providers and the Digg community,” Digg’s John Quinn writes today. This would seem to suggest that company realizes it’s still in the interest of most content providers to get the link juice that comes from Digg. It would also seem to suggest that it doesn’t want firestorm of controversy similar to the one it created with the DiggBar.

This move comes at an interesting time for Digg, as sites like Bit.ly look to be setting up to battle for who has the most interesting link data on the Internet. Twitter itself has been testing out the tracking of links from its site, though it claims to be just doing so for internal product purposes.

How Digg judges which sites they trust, they don’t say. But one would have to assume that these sites are different from the ones that are straight-up blocked from the service for being spammy. Untrusted links in comments, profiles and story pages will also get the nofollow tag as well.

[photo: flickr/brianware3000]

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It shrinks longer links in order to make them more tweetable (and retweetable), it gives you some options to share links from its main website, throws in some analytics so you can see just how few people actually click those links you’re spreading and comes with an API.

The only slight advantage it could have over competitors like TinyURL and bit.ly is a tight integration with the TweetMeme service / button, but they won’t be exploiting that connection and keep on supporting the URL shortening services as they were before (which is obviously the right thing to do).

TweetMeme founder Nick Halstead asks the appropriate question in the e-mail announcing ReTwt.me: why did they build this? The answer:

Firstly and foremost ‘reliability’, we pride ourselves at TweetMeme for the continued up-time and scalability of the service. Going forward we wanted to have ‘platform security’ that we always had a fallback position if any of the current shorteners either closed down or had any outages.

I have my doubts about ReTwt.me being more serious about uptime and scalability than some of the other services, like bit.ly (a venture-capital funded startup to which URL shortening and analytics is core business) and Digg (which I’m sure has a lot more load on its servers than TweetMeme currently has), but having a fall-back option I guess makes sense.

Nevertheless, I can’t imagine why any end user would want to switch to ReTwt.me for URL shortening purposes. Halstead bets on the simpleness of the service, but I don’t know how anyone could make the existing URL shortening services more basic than they already are.

But please do judge for yourself (and don’t forget to retwt this story).

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Here we go again. The newspaper industry is blaming online news aggregators for its dwindling profits and inability to adapt to a world of links and truly-free flowing information. (They like it when information flows freely into their pages, but not so much when it flows out).

On Thursday, paidContent ran an essay by media consultant Arnon Mishkin called “The Fallacy Of The Link Economy” which was misguided on so many levels. Mishkin’s main argument is that:

The vast majority of the value gets captured by aggregators linking and scraping rather than by the news organizations that get linked and scraped.

It is not really clear whom he is calling an aggregator—actual news aggregators like Yahoo News, Google News, Digg, Techmeme and the Huffington Post, or anyone who links to a news story. After all, he equates the entire web to the blogosphere, which says more about his parochial industry view than about the web. In his mind, the web is the enemy and links are bad.

What really seems to concern him, however, are news aggregation sites. They threaten newspapers because they are emerging as the new front page which people skim every morning for headlines instead of going to any single newspaper site. Mishkin argues:

Historically, the value of those casual browsers was captured by the newspaper because the readers would have to buy a copy. Now all the value gets captured by the aggregator that scrapes the copy and creates a front page that a set of readers choose to scan.

Set aside for a second that ads on news aggregation sites are usually worth a lot less than ads on original content sites and thus they are not capturing the same value. More to the point, when I first read this my immediate response was that the value of news sites does not come from getting people to skim headlines, but to actually click through and read the actual stories. The newspaper industry wants to go back to the world before the Web, when each newspaper was a small media bundle packed with stories, 80 percent of which sucked. But it didn’t matter because you’d gladly pay a dollar to read the one or two stories that caught your eye on the front page, hoping there would be more inside.

Well, guess what? The media bundle is dead. News sites can no longer capture reader’s attention with 20 percent news, and 80 percent suck. Each story stands on its own in a world of atomized content where readers can come from anywhere on the Web, not just the front page. Now in addition to the front page, there are a million side doors. Reader lock-in is gone. The sooner newspapers get used to that concept, the sooner they can start to adapt and survive.

Which brings us back to the value of news aggregators. The newspaper industry is looking for someone to blame. Usually, it’s Google, but really anyone on the Web will do. Rather than blame the aggregators, news site should take advantage of them. On the Web, every side door can be a front page, whether it is Google News or search or Digg or Twitter or a feed reader or My Yahoo. I’ve said this before about Google, but it applies to any site that links to the news:

Google does not control the news, it exposes it. . . . It is incumbent upon each of us to attract an audience by having something original or interesting to say.

And if a news site or a blog can say enough interesting things enough times that news aggregators (or other sites) keep linking to them, then they can build up their brand and reader loyalty. Maybe readers will click on those links if they see it is coming from a trusted source, and then maybe some of those will start coming to the news site itself on a regular basis. But that loyalty must be earned every day, story by story, post by post. The more front pages (or side pages) which point to a news site’s stories, the more chances it has to gain that loyalty.

But the days of the media bundle when readers got all of the day’s news from one site are long gone. So too are gone the cushy days when newspapers could count “casual browsers” as real readers and sell them to advertisers. Newspapers had better get used to a world where links exist and can whisk readers away as quickly as they bring them. Those who don’t will learn that trying to recreate the past is a sure a path to an early grave.

(Flickr Photo: John Vachon/Library of Congress)

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Digg’s been busy lately adding new features—some loved, some not—but they seem to be having a positive effect on overall. In June, comScore estimates the site brought in 8.8 million unique visitors in the U.S alone, up 31 percent over the preceding three months.  Update: The July numbers just came out, and Digg’s unique U.S. visitors went up to 9.5 million.

What accounts for the change all of a sudden? Well, by Digg’s own admission, once it introduced the Diggbar it saw an initial lift in visitors just as a result of people passing around short links. And it’s been getting even more aggressive on that front lately, having to reverse itself at times.

But it’s not just the Diggbar. The site launched a decent search feature in April (which always helps generate more traffic) and Facebook Connect in May.

Its recently-introduced Digg Dialoggs with people like Al Gore, Trent Reznor, and Marissa Mayer have also been popular. Users can suggest and vote on questions of be asked during a video interview conducted by Digg founder Kevin Rose.

What do you think is the biggest source of new visitors to Digg?

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Here’s how it works: the more upvotes an ad gets, the less advertisers have to pay, giving them an incentive to produce content that will appeal to the Digg userbase. At this point it’s too early to tell how the ads will fare (there’s a chance Digg users will just launch a bury brigade whenever they see one), but if the screenshot below is any indication they stand a fair chance at being a hit — I’m sure plenty of Digg users would jump at the chance to get a cheap Three Keyboard Cat Moon shirt, and there are plenty of other memes that sites like Threadless could capitalize on. Likewise, I’d imagine electronics companies could see good traffic by promoting discounted video games and equipment.

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Sure, Kevin gets to hang out with the Hollywood crowd and become BFF with Ashton. And yes, I’m somewhat interested in hearing all about “Ashton Kutcher’s Web 2.0 Strategy,” as pitched to me in the email (in the same way that I can’t not look at accidents as I drive by). But none of the story ideas pitched to us (Ashton and Kevin: Why Traditional Hollywood cares about Unconventional Silicon Valley, How mainstream consumer products are merging with new media, Why Ashton thought it was important, in fact, critical to reach Diggnation’s audience), along with “exclusive access” to Kevin and Ashton, really interest me. What I really want to know is this:

Why is Kevin Rose screwing around in Las Vegas with a movie star when a fricking URL redirect service is preparing to eat their lunch?

Digg isn’t the shiny new startup that it once was. Twitter has almost twice the audience that Digg has (45 million v. 24 million worldwide uniques in June according to Comscore). As recently as March Twitter was still smaller than Digg. Now, it’s not even close.

Digg’s product needs serious attention from Kevin. The recent DiggBar changes that enraged users caught Kevin off guard because he was on vacation in China and didn’t know what was happening. He needs to pay attention. Or else relinquish his control of the Digg product to someone else who’ll pay attention.

The next six months are critical for Digg. They are rolling out a new real time product to try to compete with Bit.ly and Twitter. It seems to me that Digg’s investors would be happier if he were working on that, instead of partying in Vegas with the guy from Dude, Where’s My Car?

That being said, I still can’t wait to hear Kutcher’s Web 2.0 strategy and his advice on “merging the worlds of mainstream entertainment and new mediums like Internet Television.”

Update: Kevin Rose response in comments below:

Mike, I set aside two days a month to shoot episodes of diggnation (this has been the routine for the last 4yrs), and we shoot several live shows per year. Without a doubt the podcast has proven to be a great tool to spread the word.

Sorry about the strange pitch from the PR agency.

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Now, let’s be clear: This doesn’t mean that people who post an item on Digg will get alerts every time someone comments — that would be awful. Instead, this means that if you leave a comment on an item, you will get alerted when someone comments on that. And this will occur only for top-level comments and not nested ones.

And while that may not sound so bad, it’s no secret that Digg, like many big sites, has a comment section that is almost completely run by trolls. It takes actions to combat that, such as the burying and promoting of certain comments, but this new email alert system will bypass that.

So if I want to leave an insightful comment on Digg, my inbox is now likely to get overwhelmed by the random garbage comments left in response. Sure, some of them may be thoughtful replies, but in my experience, most will be rubbish. And that’s fine, but just don’t email them to me. But Digg is, by default.

You can turn the email alerts off on this page. Or, perhaps even easier, you could just do what plenty of Digg users do, and not comment.

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Retweet.com currently only has a a landing page saying that it’s “coming soon,” so it’s hard to know exactly what it is from that. But there are plenty of clues around the web pointing to it being a TweetMeme competitor. The main hint comes from a design contest taking place at 99designs. The prize is over $1,000 to design the site, and all of the mockups look very similar to TweetMeme (which, to be fair, takes a lot of its look from sites like Digg).

And there’s more. The group behind Retweet.com, Mesiab Labs (which seems to have a poor reputation among the Twitter community for products like Hummingbird, that some have accussed of spamming others), has a few sites related to Retweet.com that are already live. One is the URL shortener RT.nu, which will clearly be used to send out the retweets from Retweet.com. Another site, Checkretweet, scours Twitter for retweets for any user. Each of these play into the bigger strategy of the site, according to this blog post. And here’s the key nugget from that post, “Together, these systems allow us to detect and deliver breaking news faster than any other media outlet at present.”

So it looks like they’re setting up Retweet to take on not only TweetMeme, but also Digg, Google News, Techmeme and the new service that Bit.ly is working on. They key to all of this is obviously the links that are getting tweeted out and then retweeted. And because the latter word is entering the lexicon of the web, Retweet.com has a pretty awesome domain for trying to come along with a new service in this field.

That little trademark sign in the upper right hand corner of the logo is also interesting. It may just be for the logo, because it seems like they might have a hard time trademarking the word “retweet.” Though, that would be a potentially very scary situation for TweetMeme and all those little green buttons.

Let’s not get ahead of ourselves though, Retweet.com still has to execute — and launch. But this is probably something to watch.

[thanks Orli]

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News aggregator site and Digg-competitor Mixx had a rough June. Traffic to the site took a 68 percent nosedive in the U.S. from May to June, according to comScore (see chart). Compete shows a similar trend.

Wondering if Mixx had maybe been paying for traffic and had now stopped, I asked CEO Chris McGill if this was the case. Absolutely not. He replied: “We have never paid for traffic… Not once. How could we? … We have operated for two years on almost no money.” Hard to argue with that. Mixx has only raised $3.5 million to Digg’s $40 million, and is “nine guys sitting in a boiler room.”

So what happened? McGill admits, “We had some performance problems in the month of June.” A database problem and a DNS change ended up temporarily blocking Google. Traffic was only down 30 percent, says McGill, and has almost fully recovered in June. He sent me a screen grab from Google Analytics (below) showing that in the first half of July, unique visitors tripled to 1.5 million compared to the first half of June. For the full month of June, he sent me a Google Analytics page showing 1.8 million total visitors. (comScore’s estimate for U.S.-only unique visitors in June was 337,000, but it typically under-reports traffic for small sites).

If Mixx’s drop was just a technical issue (and I have no reason to doubt McGill’s explanation, he was very upfront with me), then comScore and Compete should pick up the site’s rebound in their July numbers. I hope that’s the case because Digg needs competition. For instance, in April, Mixx started experimenting with showing ads based on user voting, a great idea which Digg then started taking seriously in June. And just yesterday, it launched TweetMixx to tap into hot links appearing on Twitter.

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Those changes to the DiggBar that we noted on Sunday are, apparently, permanent. We expect Digg to make an announcement about those changes later today.

We first heard about the DiggBar in February, and the product launched in April. At that time Digg was calling it a short URL service, meaning users could convert long URLs into short ones that are better suited to services like Twitter and Facebook. Unlike other services, Digg kept their own toolbar at the top of the page with Digg stats on the story as well. The underlying URL was shown in an iframe.

Some sites weren’t pleased to have their content framed around Digg stats and blocked the service. Digg capitulated and did a full redirect for non-logged in users, so people who don’t use Digg were simply sent to the underlying site. Everyone seemed happy with the service from that point on.

Except Digg, it seems. The tool was no longer sending new users to the Digg.com site, since those users didn’t see the Digg wrapper when they clicked on the URL. The changes noted last Sunday reversed how non-Digg users were treated. Instead of a redirect to the original URL they are sent to the Digg story about that URL. Effectively a bait and switch.

Digg founder Kevin Rose, fresh back from vacation, wasn’t aware of the change to the service. He Twittered out links to some pictures using the DiggBar link and was surprised to see the story auto-submitted to Digg. He followed up asking people to bury the story, and then Twittered once more saying he “was not aware” of the change. And then just to add to the confusion, he Twittered yet again that he did know of the change, he just didn’t know when it was being rolled out.

DiggBar is no longer going to be described as a URL shortening service, we’ve heard, and Digg intends to make these new changes permanent. We’ve also heard that they will treat old links created with the DiggBar under the old rules to avoid being accused of hijacking that traffic to their own site.

These changes aren’t all that meaningful on their own. But it does show that Digg isn’t interested in competing with Bit.ly and other services that are seeing massive data flows from useful URL shortening services. The fact that Bit.ly intends to compete head on with Digg via those data flows isn’t non-trivial. Two days ago I predicted Digg would realize this and quickly reverse the policy changes. But I was wrong. Digg does fully realize the competitive landscape. But it seems they don’t care to compete in the short URL space. Instead, they are going to grab the short term traffic benefits from redirecting these URLs to their home page.

That seems shortsighted to me, and it is certainly not the best user experience. But Digg is clearly looking to become profitable this year. Sometimes the users suffer somewhat as tough choices are made.

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