Digg Starts Making Money

Filed in archive Web 2.0 on March 15, 2010

© NightRPStar


BusinessWeek ran a piece late last month on the link sharing site Digg, and how it has suddenly figured out how to make a profit.

Advertising pays for most things in media. Whether it's broadcast television, radio, cable or the Internet, most pay-for-content models have failed. It ends up being the audience and not the content that's for sale. Attract a big audience and you have something to peddle to advertisers. Just selling content, by itslef, works for music at Amazon and iTunes - but not for much else.

Digg has discovered something fascinating. I like to call it contextualization. Everybody's on to the advertising thing. It's no secret. Most Internet audiences realize they're doing you a favor by reading your stuff. They feel entitled to free content. BY reading it, they validate you. Those readers see ads, and they kind of resent them.

Digg found a way to may advertising look more like content. Readers see the ads and feel more comfortable with them. Click-thru rates are up, and Digg's making money.

So now the rest of the world is chasing its tail, trying to figure out how to contextulize their advertising and make it more comfortable.