Nobody killed Digg. Digg committed suicide by telling it's original, loyal user base to go fuck themselves in it's quest for more money and a broader audience. Digg became too greedy.
But it was pretty obvious much earlier on that Digg had zero respect for its users. In many ways, Digg had a very old school broadcast attitude: the users were merely part of the product, only the advertisers mattered.
The problem digg faced is that their loyal customers were not sufficient to warrant the amount of money they had raised. If they had done nothing, it would have been suicide as well.
The problem they faced, then, was in deluding themselves about their valuation, and raising more capital (and incurring greater obligations) than they could meet.
Digg were apparently sustainable at their prior valuation, and with their existing userbase.
They sold their investors the idea that they could monetize their users at a higher level than their previous advertising model permitted. That meant that they had to come up with a new model and that new model pissed off the users and ultimately killed the egg laying goose.
This is the same problem Facebook is facing having promised investors astronomical per-user revenue. They continue pissing off their users and if they aren't careful the next ad-based redesign could be the turning point.
yeah, but I think they believed they could grow into something bigger. I.e, the same thing all startups believe, and typically fail to do.
Don't get me wrong, I think they'd have been far better off taking far less money and simply being a profitable property. I think nearly all startups would be better off doing this. I just don't believe that digg did anything abnormal for a typical startup.
But it was pretty obvious much earlier on that Digg had zero respect for its users. In many ways, Digg had a very old school broadcast attitude: the users were merely part of the product, only the advertisers mattered.