Digg for sale! Again. This time it’s for real. Maybe.

TechCrunch is reporting that Digg is likely to get sold soon – probably to Google and probably for about $200,000,000.   Good for Kevin Rose and the VC folks, but I’d like to know from the key Diggers if they’ll feel any loyalty to the new owners or to the project.   Also, do they think they are owed more than … zero… on this deal?  

Social sites do offer their participants something of value = participation and platform – but are there “losers” in these equations? 

How do the high level participants who have put in thousands of hours and made the site what it is feel about these cash outs?

I’m wondering how often distribution of equity during the  *liquidity* event properly reflects the building of equity.    Entrepreneurial capitalism correctly asssumes you need to highly reward risk to get folks to take business risks and innovate.   But as Mike Arrington has noted entrepreneurs have a value system that appears to actually assign a high value the thrills and chills of the experience.   Thus to get optimal production and innovation it appears to me we need to pay “deeper” on these big internet deals.   In the case of a YouTube, DIGG, or Facebook I’d find a way to reward those down the food chain in some proportion to their contribution to the enterprise.   It’s possible that these rewards would be small enough that I’m wrong to think this matters much in the overall equation of optimizing the capitalist experience, but even a modest reward would brand the mega deals as “fairer” than simply a situation where fat cats effectively exploit self-motivated worker bees who have generated the user content and social networking that the market values so highly right now.

Information Sharecroppers of the World, Unite ! ?

Update:  I think Nick (and I) may owe Newsvine an apology, because Newsvine does not really practice sharecropping.   The members own their own content and this means a lot more control than otherwise.    Obviously the landscape is complex with any social media but I don’t think I can object to Newsvine’s model.    My concern is where the site takes ownership of the member content.


Nick Carr  has a good post today noting how the Newsvine aquisition, and other deals like this, can lead to some information “sharecropper” dissent.     As I pointed out yesterday social media is a great thing, but it seems to be dramatically failing to fund the very forces that make it a great thing – the hardest working content providers that often form the backbone of these entities.     Kevin Rose is worth tens of millions because tens of millions of diggers work for him – for free.   Sure, he’s smarter than most of his minions and he pulled it all together which means he should get a big digg payday some day, but should he, the founders, and the VC funders get *all* of the money when even they’d all agree that digg is valuable primarily because of all the people that do the digging.

Newsvine was a superb project that was beautifully implemented, but like Nick I wonder how long those who helped make Newsvine such a great site will keep working for nothing.     Is  Web 2.0 simply a new twist on feudal economics?