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How Reddit Beat Digg

http://www.forbes.com/sites/insertcoin/2012/07/13/facebook-didnt-kill-digg-reddit-did/

While Professor Kleinberg’s and Professor Tardos’ lectures are always interesting, the sight of students gazing at their laptop screens and smartphones instead of paying attention is nothing to be surprised about. More often than not, they are browsing Facebook or Reddit. But a few years ago, it would have been quite different. Instead of Facebook, people would be on Myspace, and instead of Reddit, Digg. The article describes how Digg eventually dug itself into the ground (pun intended) with v4, a version of the site so unsuccessful it drew users away and began its downfall. A site that was originally valued at $200million was eventually sold for only a quarter of a percent of that, a measly $500 thousand. How could something so big fail? The graph in the article tells us the story.

A person’s decision between using Reddit and Digg employs both direct benefit principles as well as information based principles, but moreover direct benefit based. Both sites function the same way: users will post links to other sites and other users can vote and down-vote those posts as well as comment on them. This process separates these two sites from other social media hubs like Facebook and Twitter, and Reddit and Digg are known as news aggregators. In September 2010, we could see the effects of direct benefit principles in action. Digg’s usage was declining and its declination led more users to stray away. On the other hand, Reddit was gaining momentum and continued to do so. In October 2010, we saw the big impact of information based decision making. The launch of v4 drove Digg usage to an all time low and Reddit was still gaining momentum, but the rate at which it gained increased due to it taking in former Digg users. Afterwards, Digg reached a stable equilibrium; its usage stayed in the eight and nine million range. Reddit, on the other hand, continued to shoot up. In the end, Reddit’s usage almost doubled and Digg’s usage almost halved.

In direct benefit analyses, there is always a reservation price. But both Reddit and Digg were free services; in that case what affected the reservation price? The answer is comfort and learning curve. Reddit stayed simple and maintained a clean interface. Furthermore, its popularity graph would have a long tail; it caters not only to a main page but many niche subreddits, each with their own subscribers. On the other hand, Digg kept changing its interface, and putting ads that were intrusive and ruined the experience. Users felt neglected and decided not to put up with it anymore. The moral of the story is: if it ain’t broke, don’t fix it. Perhaps if Facebook continues to use its current ad policies, users may switch over to say, Google+ someday.

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