Three years ago, Paul Graham and his Y Combinator incubator funded Reddit, a social news site that has grown to over 2.5 million unique visitors a month. Reddit has never been able to match the success of Digg, its closest competitor, but in 2006 it got its payday after being acquired by Condé Nast/Wired for an undisclosed amount.

Now, it seems that Y Combinator is hoping that lightning will strike twice. Its latest startup, Slinkset, is looking to offer a “hosted Reddit” solution, allowing users to create their own social news sites with as little technical knowhow as possible. You can see a hosted version of the site that has been created for TechCrunch readers here.

At first glance, Slinkset looks like little more than a Reddit clone. Users can vote news stories Up or Down, with the most popular stories rising to the top of the page. The big difference here is that unlike Digg and Reddit, Slinkset isn’t looking to become a destination site. Instead, it’s offering users the chance to create their own branded “Reddits” with no coding necessary. For the time being Slinkset is offering its hosting service free of charge, with plans to introduce a fixed fee in the future.

Unfortunately, despite its aspirations to let users to create no-hassle branded pages, Slinkset’s customization options are pretty limited. Site admins can easily swap the color schemes, adjust fonts, and add a logo, but that’s about it. In the future the site hopes to integrate drag-and-drop widgets and ad placement, but with a company that currently consists of only two co-founders, these are probably a ways off.

So is Slinkset really necessary? You can already create your own hosted Reddit through Reddit itself (albeit with limited customizability). Mixx, another competitor in this space, also features a similar hosted offering.

And the site’s launch comes less than a month after Reddit went open-source, allowing developers to create their own, fully tweakable, Reddit clones (you can see our version, Tech News, here). Slinkset co-founder Brett Gibson says that while the release of Reddit’s source code will help skilled programmers create their own social news site, it won’t do any good for the legions of bloggers and small-time sites that don’t know how to implement it, which is where he hopes Slinkset comes in. This may be the case, but unless Slinkset can improve on its customization features, it will have a hard time separating itself from its well-established competitors.

Reddit announced an open source version of its popular news aggregator service this evening, and we’ve launched our own version of the service, called TechCrunch TechNews. Links from any news source can be added, we’ll leave it up to the community to filter it up or down.

This is to take nothing away from Reddit itself, or Digg, Hacker News or the other dozens of news aggregation sites out there. We just want to see the news that our own community thinks is most relevant, and Reddit just made that incredibly easy for us.

We put this together pretty quickly this afternoon, and it is still on one of our test servers. Over the next few days we’ll get the details sorted out.

Here is a (completely unwatchable) video stream from the Reddit party tonight where earlier tonight they announced the new product, and the launch of TechNews.

It is not easy being No.2. As we hinted yesterday, Reddit, the news voting site that was bought by Conde Nast in 2006, is making the code behind its site open source. (The code can be found here). That means anyone can now make their own Digg-like site. Not that there has been any lack of Digg clones in the past. Reddit’s move to open-source its software is merely an acknowledgment that it is already a commodity.

The truth is that it is not the technology that makes sites like Digg or Reddit successful. It is the people who use them. And the more people who use them, the more useful they become. It is a classic, network-effect, winner-take-most market.

And the winner here clearly is Digg (as long as it doesn’t alienate it’s core users), despite valiant efforts by Reddit, Mixx, and others. In May, Digg had more than 20 times as many U.S. visitors and pageviews as Reddit, according to comScore. Even if comScore is undercounting, and the relative gap is only half that much (which is what data from Compete suggests), it is still pretty insurmountable.

(Note that comScore is almost surely undercounting Reddit. It measures only 300,000 unique U.S. visitors in May versus 6.3 million for Digg. Whereas Compete measures 2.4 million versus 24 million, respectively. That is why it is more informative to look at the relative gap than the absolute numbers in this case). Here is a comScore chart comparing pageviews. See how flat Reddit has been all year.

Social news website Reddit will be making an announcement at its invite-only party tomorrow in San Francisco. Invites include the image above, prominently featuring a mysterious penguin alongside the company’s logo (the alien thing). So what are they getting at?

Penguins have long been associated with the open-source OS Linux, stemming from Linus Torvalds’s decision to use one as Linux’s mascot (he’s named Tux, and you can see him here). Could Linux somehow be involved in Reddit’s announcement?

Earlier this year Reddit launched a feature that let users customize their own “Reddits” by topic, allowing them to selectively filter stories. It’s possible that Reddit is going one (big) step further and introducing an open source version of Reddit that will allow users to create their own hosted social news service.

Is that a stretch? Yep. We actually have no idea what they’re announcing. That penguin might just be there to indicate that the beer is free… or cold.

Think you know what they’ll announce? Give us your best guess in the comments. Whoever guesses right first gets a free TechCrunch t-shirt.

Update: Brent Csutoras may have gotten a peek at one of Reddit’s new features, which appears to be tagging. This doesn’t have anything to do with the penguin though, so Reddit may have a few more things up their sleeves.

Update 2: Yup, they are open sourcing the Reddit code. Here’s the announcement. And here’s our update.

Hacker News is a Digg/Reddit-like site that I am visiting more and more often. It’s my first stop in the morning, and I check it out a few times during the day as well.

Why? Because it’s focused mostly on startup and hacking news, which is what we cover. It’s one of the best places to find information on startups we haven’t heard about yet. And, better, the community is jerk-free. Comments are mostly helpful, thoughtful and interesting.

Like Digg and Reddit, users submit stories to the site, and others can comment and vote on them. But Hacker News is also a forum of sorts, where users can simply post questions for others to answer – see this one asking for advice on creating a demo video for a new startup. Popular stories and questions move to the home page over time.

Hacker News used to be called Startup News and was launched in February 2007 by Y Combinator. They say “the most important goal of news.ycombinator was to create a place where founders and would-be founders can meet and talk.”

Hopefully as the site continues to attract new users, the magic won’t be lost.

Social voting outfit Mixx has taken $2 million Series A1 in a round led by existing investor InterSouth Partners.

Mixx offers a category based social voting service that competes with sites such as Digg, Reddit and Propeller. McLean, Virginia based Mixx was launched in September 2007 with talent including former executives from Yahoo!, AOL, USA TODAY and The Associated Press. The company has regularly launched new features in an attempt to stand out in a market place with strongly entrenched loyalties to existing players.

Mixx added the LA Times to its investor group in December. Total funding to date is $3.5 million.

(via VentureBeat)

Digg competitor Mixx continues to impress us with new features (although the exodus of Digg users to them may have been short lived).

A new feature launches this week on Mixx called Related Items. It solves a common problem found on Digg and other sites where multiple articles on the same story compete with each other to get to the home page. One person may submit a story from USAToday. Another may submit basically the same story but from the Washington Post. Those stories are tracked separately on Digg, and votes are split between them as users discover them. The result is that the story takes longer to get to the home page than it otherwise should. Or worse, both make it and the story is duplicated. Digg catches duplicate submission for the exact same link, but they are unable to determine if stores are related.

The Related Items feature on Mixx flags a submission when it thinks that a story is similar. A message appears that says “We may already have this story! Or at least one startling similar. Take a look at the stories below.” The user submitting the related story can then choose to submit it anyway, or add it as a related item to the previous submission. Digg also flags stories that may be similar to other submissions, but does not offer the ability to cluster the new story to the old ones.

There is a benefit to the submitter in adding the story to the previous submission because the new story will be added, too (and traffic will flow). Users benefit because they get more information and perspectives on the story. Here’s a screen shot of how the clustering will look (click for bigger view):

The clustering that will occur from this will very much resemble TechMeme, which is a great way to quickly find multiple perspectives on the news.

Mixx, which is backed by Intersouth Partners and the LA Times, is still a tiny blip compared to competitors like Digg and Reddit. Comscore says Digg has 12 million unique monthly visitors, compared to about a million on Reddit. Mixx? They’ve got just 45,000. That’s probably a low count, since newer and smaller sites are much harder for Comscore to measure. but they have a long, long way to go before they are even no. 2 in this market. The company was founded by Chris McGill.

According to a company blog post, social news site Reddit has launched, in closed beta, the ability for users to create their own “reddits”.

The new feature will eventually allow all users to create their own social news lists for chosen topics. These customized reddits will come in three flavors: public, restricted, and private. If you set up a public reddit, every Reddit user will be able to view and participate in the reddit. Restricted reddits will only allow certain members to contribute. And private reddits will only be viewable by their own members.

For the next week or so, Reddit will solicit a “handful of users” to try out the new feature before opening it up to everyone. Mixx has implemented something similar, while we’re still waiting for Digg to do the same. As these social news sites become more platform-like, we’ll see them competing with offerings like Fraxi (covered here) and Pligg.

Now that I have your attention, Compete has released a list of the fastest-growing (and fastest-declining) sites of 2007. Some of the fastest growers include Veoh, LinkedIn, Reddit, StumbleUpon, Six Apart, and WordPress. Some of the notable sinkers are Bolt, Xanga, Netscape, and Autobytel.

TechCrunch has the distinct honor of taking the No. 5 spot in the fastest-growing list, right behind YouPorn and in front of DateHookup. I am not exactly sure what to make of that. I guess Compete thinks we’re hot.

Social voting remained a popular past time in 2007 with sites such as Digg more than tripling their audience, but some sites fared better than others according to data from comScore.

One name with a long history is the AOL owned Netscape.com. The site was relaunched in June 2006 as a Digg clone with high hopes that a new generation would use the once great brand as an alternative to Digg. The strategy failed dismally, but the termination in the end was even worse. From November 2006 through to August 2007 (the last full month as a Digg clone) Netscape’s traffic dropped from 305 million pages views a month to 137 million, a 55.1% drop in 9 months. AOL dumped social voting on Netscape September 19, and things went from bad to worse, with traffic dropping in August from 137 million page views to a dismal 38 million in November, down 72.3%.

The new home for the Netscape social voting experiment Propeller performed reasonably, but failed to capture most of Netscape’s previous social voting audience. With 13 million pages views (according to comScore) in November 07, Propeller has managed to pick up less than 10% of Netscape’s August audience.

The big winner once again in the social voting space was Digg. Starting at 11 million page views in November 2006, Digg saw a 318% increase in traffic to 46 million 12 months later. Reddit fared well increasing from 2 million page views in February 2007 (the first month it was big enough to be recorded by comScore) to 9 million in November, although October was a highpoint with 16 million page views.

Michael Arrington wrote on Saturday about a new Digg competitor called Mixx, and how it was attracting “Digg Refugees.” Digg clones or similar social voting sites are far from new, but given this new competition does Digg still come out on top? Since reading Michael’s post I’ve spent time using several Digg-style sites to see if I could find the answer.

Numbers

Numbers should never be the final arbiter of what is good. Windows is still the most widely used operating system world wide but many would argue it is far from the best; however numbers help, and as comScore demonstrates Digg is still the most popular social networking site when compared to three competitors: Reddit, Propeller and Mixx.

It’s hard to make out Propeller on this chart, but with a microscope they are a small blue dot just below the October (green) line for Reddit. Despite some of my previously harsh observations on the service they are doing remarkably well under their new banner; if Reddit sold for a rumored $12m in October 2006, Propeller must be worth around $30-50 million now based on the traffic alone. Mixx is soo small it doesn’t register on comScore’s metrics.

More people use Digg, but does it make them the best service?

Content

Content is something that benefits from a bigger user base, and again Digg has the advantage here. When Propeller launched (originally the old new Netscape) then head Jason Calacanis promised a better version of Digg because the results and top stories would have the guidance of paid guides. It works as much as it provides a broader picture of news stories, but it fails in the same way that any non-democratic decision making process does: it doesn’t always have the support of many. It’s not unusual to see stories on the top of sub-sections (say Tech) on Propeller that had a handful votes despite the site having a reasonable user base that usually sustains stories on mid-range 2 figure sums. If it has two votes, should it be on top? It wouldn’t be on Digg.

Reddit has the problem that despite it providing perhaps the biggest difference in terms of the content and links provided, it appears to be beholden to the political campaigns of Ron Paul and Dennis Kucinich. I find some interest in both campaigns given their interesting and often inspiring use of the internet as a campaigning tool, but I’d figure that I’m probably in the minority on that one.

Mixx is getting there. Since Michael’s post the number of people voting on the site has definitely increased and even former Netscape head Jason Calacanis is now participating (a Mahalo link was the top story as I wrote this post).

Usability/ Looks

Appearance is subjective and no two people usually agree on any given site, but there’s just something about Digg. Whether it’s the nice big headlines, the easily accessible voting box and bury buttons, the colors and layout that just work; it could be that it’s a case of familiarity but I just don’t see the same on the other three sites.

Reddit is functional and simplistic, which works for them, but it isn’t pretty to look at, and it’s probably not the best first impression for new users either.

Propeller tries to sit somewhere between Digg and a functional news sites, and it doesn’t do a bad job, but I’ve never felt as comfortable with it. Headlines are smaller and visually it doesn’t feel quite as accessible as Digg; but having said that this is a subjective view only, and others may well disagree. Mixx is remarkably similar to Propeller, soo much so (once you get to the sub pages) that I’d suggest that Mixx isn’t a Digg clone, it’s a Propeller clone.

Overall

One often heard criticism of Digg is that the headlines can only be understood by “insiders,” those that know tech. It’s occasionally a valid criticism but over all Digg’s biggest strength is its depth and variety of content. The politics pages don’t require an in-depth understanding of the latest screen manager for Linux, nor do many of the sub-categories. Redditt is Digg’s closest competitor appeal wise, but it doesn’t have the depth and variety of news headlines. Propeller and Mixx will have the greatest appeal to a new, non-geek/ non-first adopter audience, but that very same audience may not be quiet as embracing of social voting itself. It’s the right demographic to appeal to because it’s an untargeted audience, but Digg continues to gain new followers as well as its audience broadens (despite the small decline in the comScore graph); call it a race for middle America.

On what I’ve seen I still believe Digg to be far and away the best social voting destination based on its current competition. However all competition is good and I do encourage others to try and use other sites; it’s the best way of keeping Digg honest in the future.

Update: I’ve just noticed Allen Stern is hot on Propeller. Read here.

New startup Mixx, which went in to private beta just two months ago, may be finding itself with the right product at the right time. Digg users, including top contributors, are showing an increasing amount of frustration with the Digg community, and many are leaving. Conspiracy theories that Digg auto buries stories with certain topics or linking to certain sites only compounds the problem.

Some users eventually go to Reddit, Propeller or any of a number of other Digg-like sites. But a disproportionate amount of them seem to be heading to Mixx, and writing about their choice.

Dave Eaves gives Mixx a thumbs up and says “I have already had quite a lot of success with getting my submissions voted on, this may be partly due to the fact that many of my digg friends have joined the site.”

Vandelay Design says “Unlike 99% of the other Digg clones, I think Mixx has a real chance for success…Mixx has a much more positive audience than Digg. It always amazes me that even the most popular and highest quality articles can get so many negative and unnecessarily degrading comments on Digg. So far the users of Mixx have proven to be quite a bit more pleasant, something that I know will be welcomed by most users.”

Finally, JD Rucker notes that a lot of top Digg users are at least experimenting with Mixx. And he mentions specifically that Greg Davies left Digg for Mixx.

Mixx users have even set up a category in their forums called Digg Refugees for users to discuss the phenomenon and spread conspiracy theories.

Compete shows traffic rising dramatically since launch, without the usual drop off that occurs after the initial press about a site dies down. It’s still a blip compared to Digg, the fact that early adopters are leaving Digg and quite vocally telling the world about it, Mixx may be a startup to keep an eye on.

New startup TasteBook launches on Wednesday morning, with a lot of help from Condé Nast: an investment from their Internet unit (CondéNet) as well as a partnership with Epicurious, a Condé Nast property.

TasteBook is a service that lets users take their favorite recipes from partner sites (starting with Epicurious) and create printed cookbooks that are delivered to them and/or friends. Users can add their own recipes as well, and customize the book with their name and other information. Blurb, which was recently in the news, is somewhat similar but does not focus on recipes.

A book with 100 recipes costs $35.

TasteBook is based in Berkeley, California. It was founded in February 2007 by Kamran Mohsenin, the co-founder of Ofoto (now the Kodak Gallery), and Greg Schroeder, formerly the chief technical architect of Ofoto.

The size of the Condé Nast investment is not being disclosed. A year ago they acquired Reddit; however, to date they have not been known for making non-acquisition investments in startups.

While Digg seems hard pressed to break out of its geek-infested niche, other sites are using Digg-like voting mechanisms to attack a much larger and much less tech savvy crowd: celebrity gossip aficionados.

This evening the newest, Showhype, launches, joining a number of existing sites. More on each below:

Lipstick: A Conde Naste site powered by Reddit, which Conde Naste acquired in late 2006.

Dotspotter: Launched June 2006, and just acquired by CBS for $10 million.

SugarLoving: Described by Sugar Inc. CEO as “Digg for Chicks.” It launched last month and already has massive page views, thanks to the affiliated blogs that link into it. It covers everything from tech to fashion, from a woman’s point of view.

ShowHype: The newest of the bunch – it launches this evening. This is from the same Silicon Valley- based startup that launched BallHype in April. Users can see top news on the home page or drill down to keep track of specific movies, television shows or celebrities, all based on tagging.

A year ago everyone (including me) was talking about how social news startups like Digg and Reddit were removing the need for news editors. Why should a human, with all his/her subjectivity and bias, decide what news is appropriate for us to consume on any given day, when the crowd can decide by simply voting?

But even as Digg continues to gain traffic and new users, some people just can’t be bothered sorting through all of the headlines, many of which appeal only to a niche audience. So things seem to be coming full circle as a new set of startups put a layer of human editors on top of the social news sites to pull out what they think is the most relevant stuff you’ll want to see.

Shoutingmat.ch, which describes itself as “a civilized retreat untainted by the excesses and whims of the mob” launched yesterday. The site, which has political, technology and “lifehack” news channels, sources stories from Digg, Reddit and other sites and presents it as a headline, with contributing discussion items from blogs and other news sources. Readers can also leave their own comments.

The end result of Shoutingmat.ch looks a lot like TechMeme, another non-edited news site (albeit one that uses an algorithm, not crowd sourcing, to decide what is news).

Ironically, the current top story in tech is the launch of the TechMeme leaderboard (a story that is now 36 hours old).

Shoutingmat.ch can be a good source of news, but all those human editors take a lot of time to sort through stuff. That means it’s no surprise that their top story is old news for TechMeme and Digg readers. And since those editors cost a lot more money to maintain than a bit of software sitting on a server somewhere, the company will need to generate a lot of page views to keep the lights on. We’ll check back in on them in a few months to see if they’ve perfected the model. Until then, I’m sticking with my prediction that, ultimately, the editor is a dying breed.

Update: In the comments it is becoming clear that, despite the About section description, the company is not using humans to source news items. That makes shoutingmat.ch a direct competitor to Techmeme and a bunch of other sites…and a slow one at that. The company says they will get stories faster over time.