Facebook awed its naysayers when it became a public company worth billions. Facebook effectively made “billion” the new “million.” When sceptics believe Facebook will be the next MySpace, the notion is not an impossibility. To be like MySpace, Facebook would need to start generating losses quarter after quarter, year after year. This could begin to happen if: (1) users get bored of the site (2) mobile ads end up annoying users (3) something better comes along.
Tonight, Digg IS the New MySpace. Digg was founded in 2004. In 2006, Business Week said Digg was worth US $60 million. By 2008, Google was reportedly ready to offer $200 million.
Digg lost its value over time when bugs, low quality user comments, and the ability to game the scoring system were not addressed. Users defected to reddit. Digg was never able to regain its influence.
As Twitter and Facebook gained in popularity, Digg’s fate was sealed. Betaworks, which owns bit.ly, purchased Digg for $500,000.
8 years is a comparably short time for a social networking structure to fade. The average life span for a social network is 11 years. Diggs fate does not imply a similar fate for Facebook, but it does remind us that ‘new’ can become irrelevant very fast. Facebook, which touts the number of ‘likes’ generated per second, the monthly active users, and the growth rates to support its enterprise value.
Digg said it received over 28 million story submissions, 350 million article votes and 40 million comments in total. As reported by BBC, Digg’s popularity dropped after an unpopular re-design. Facebook’s implementation of Timeline, experiments to monetize ‘likes’ and status updates, and mobile advertising may be re-designs that ultimately undermine the popularity of the site. In the past, Facebook’s drastic changes were met with resistance but ultimately accepted by users.
This time, with the need to focus on profit, re-designs just might get more difficult for Facebook to pass on to users.