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Digg Uprising Highlights Difficulty In Valuing A Community

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This week, social news site Digg and its community got a lesson on Kenneth Arrow’s Impossibility Theorem, which basically states that no voting system can perfectly reflect the preferences of the voters. The site instituted an algorithm change designed to prevent its front page from being dominated by submissions from the same top users all the time. Carl Bialik does a good job of unpacking the issue and explaining how the new algorithm attempts to reward diversity, or getting votes from a wide range of voters. At Digg, the uproar from its top users appears to have died down, just as its past controversies have gone away. But the broader issue remains: how do community sites balance the interests of their most loyal users against their broader aims when there’s a conflict?

The issue affects all social or user-gen sites, but the timing is unfortunate for Digg, since it’s actively shopping itself around. The site’s most valuable asset is its community, the most dedicated of whom have invested a lot of time in contributing to it. If this core group is so easily set off by an effort to make the site more friendly to the broader mass of users, that could be a red flag to a buyer. While this particular uprising seems to have been quelled — in part because Digg’s management actively engaged the base — it remains to be seen if it has an impact on the perceived value of the site and community.