For me, the stand-out presentation was the case study regarding the launch of Virgin America, a new internal airline for the States and part of the Virgin group. It was founded in 2004 and started flying in September 2007. How come the launch took over three years?

As the presenter, Alex Hunter (Virgin’s Head of Group Online Marketing), pointed out, you might imagine that this would be a piece of cake. Virgin is a massive international brand. The group’s Virgin Atlantic service is well-known for being good quality and reasonably priced.

Not so. In some respects, the brand’s fame worked against them. The proposed launch met with loud protests to the US Department of Transport from the existing internal carriers. Virgin was a foreign company, they argued. Allowing them to launch would directly damage US businesses. It appeared (quite rightly) that a lengthy fight would ensue.

Virgin was hamstrung in two ways during this period. They couldn’t unveil the new planes’ impressive features and specifications — for all they knew, they’d be completely out-of-date by the time they launched. Nor could they use Richard Branson as a brand ambassador — his nationality was exactly the reason for which they were facing problems from the DoT. Also, money was more of an issue than you might imagine: they had already bought the planes and empty planes are a very expensive liability.

Legal fencing, defencing, shilly-shallying and fence-sitting ensued, for months. Finally, on December 26 2006, the DoT delivered its verdict: Virgin America would not be allowed to fly. This was a black day for Alex and the company. To that date, the Department had never reversed its decision on such a matter.

So Virgin decided to take the fight to the (metaphorical) streets.

They submitted a time-lapse video of one of the planes being painted to YouTube. Over the weekend, it garnered 200,000 views and found its way to the front page of digg. It wasn’t an especially remarkable film from a technical perspective, though at that time, there was nothing like it (all their rivals have since copied the idea, apparently).

They launched a blog called Let VA Fly (now defunct), unveiling all the sophisticated new features on their planes. At this point, they felt they had nothing to lose, so they might as well. They included an online petition, and forms which would create and send a correctly worded and legally valid complaint to individual users’ representatives, senators and the Department of Transport. Technically, it was a fairly simple site, based on open source WordPress software. But it did the job.

Perhaps because the incumbent US internal airlines are so very terrible and anything better sounded like Nirvana, perhaps because it was pitched as a classic David and Goliath story, the blog was a great success.

They decided to launch a competition to let readers name the first eight planes, then capitalised on this by specifically inviting blogosphere celebrities and idols, Stephen Colbert and Cory Doctorow, to name two (Air Colbert and Unicorn Chaser, since you asked). They created T-shirts and gave them away. They put one of their planes into the San Francisco Valentine’s parade.

Perhaps crucially, they managed to get other online communities to do much of the marketing of the site, and driving people to sign the petition and send form letters, for them. The site or posts on the site hit the front page of digg eight times. Realising that community was clearly sympathetic, they invited Kevin Rose and Alex Albrecht to film their diggnation video cast on board one of the grounded planes, driving scads of geek traffic to the site. Later paid and unpaid spots on diggnation worked equally well.

In total, 75,000 letters were sent to the authorities and 30,000 people signed the petition. It was enough. In September last year, the DoT reversed its decision and the service took off.

If it were merely an amplifier, blogging would be uninteresting. But like Wikipedia, blogging harnesses collective intelligence as a kind of filter. What James Suriowecki calls “the wisdom of crowds” comes into play, and much as PageRank produces better results than analysis of any individual document, the collective attention of the blogosphere selects for value.

Other examples which are sometimes cited include digg, Yahoo! Answers, Wikipedia and del.icio.us. People come together to solve problems and their combined effort produces better results than an individual editor or news team could manage.

However, we’re actually smudging together two contrasting decision-making mechanisms here. Henry Jenkins points out in a post related to game design that there’s a significant difference between Pierre Levy’s idea of Collective Intelligence and James Surowiecki’s topic, The Wisdom of Crowds.

The Wisdom of Crowds emerges when data from a number of sources is aggregated. The people contributing need to be acting autonomously according to the best of their ability and in competition with others. The famous example is guessing the weight of the prize bull: the average of people’s guesses turns out to be the correct answer.

Collective Intelligence, on the other hand, emerges through deliberation, where people share, alter and evaluate other’s contributions to arrive at common ground.

As Jenkins notes, Wikipedia is much closer to this second model, Collective Intelligence, than the Wisdom of Crowds approach that finds the mathematical mean of all the suggested ‘answers’. The same would be true of Yahoo! Answers and del.icio.us, and indeed of most Web 2.0 applications that revolve around a community approach.

The Wisdom of Crowds model does in some ways apply, however, to things like the digg front page**, flickr interestingness and Google PageRank, which are algorithmically determined based on the combined anonymous and competitive input of many people.

It isn’t really a question of one of these models being better than the other, Jenkins concludes. It’s more that we’re not going to get very far unless we realise that they are two different things:

Both “collective intelligence” and “the wisdom of crowds” offer productive models for game design but we will get nowhere if we confuse the two. They represent very different accounts for knowledge production in the digital age and they will result in very different design choices.

I’d contend that the approach chosen by an application designer very much depends on the nature of the problem that is being addressed. Both could be correct depending on the situation, and probably one approach would be more sensible than the other for any given application. Completely anonymous postings to Wikipedia with no editing hierarchy whatsoever probably wouldn’t be such a great plan, though it would bring it closer to the wisdom of crowds model. On the other hand, the collective intelligence method of measured deliberation and discussion about which stories to put on the front page of digg or which sites should appear at the top of Google searches probably wouldn’t work out too well either.

[**Actually, digg is interesting in this regard. The submission of stories is not anonymous, nor is the voting. This has led to lots of accusations of bloc voting, allegations of a self-reinforcing elite of top diggers, and adjustments to the promotion algorithm to try to prevent this. It is a strange amalgam of social community and wise-crowds news aggregator. The owners (and presumably enough of the users) want it that way. If the owners didn’t want the social community aspect, and the problems that has created, they’d remove all mention of user names and make voting anonymous. It’s my belief that the gaming aspect to digg is entirely intentional and part of what appears to make it so addictive to its fans.]

It emerges, however, that actually it’s not digg that is directly responsible, that’s just a trendy hook for the story. It’s being on the Internet as opposed to a (paper) newspaper. Statistics packages can provide some pretty harsh feedback for news writers that you’d never get for filing unpopular stories back in olden times. They can also supply golden information on the types of story that ‘work’. But does this ability to supply stuff people actually want to read mean that journalists aren’t doing their duty by covering the unpopular truth that no-one wants to hear?

The job of a journalist is to lobby and report stories that he or she covers, or better yet, uncovers. In this way, the story is forced upon readers. At a newspaper that’s more easily done because an editor can’t point directly to a story’s ranking and say, “Look son, no one wants to read about that. Go cover something else.” But now he or she can.

This ability to judge popularity is normally viewed as a good thing, of course. If your readership’s engagement with stories can be measured then you can find out what your audience wants and do more of it. You can discover that nobody likes this or that topic and drop it.

But does this threaten to put a stop to investigative journalism that doesn’t suit a hedonistic, irresponsible public, as Kostigen says? Well, top of digg right now is a story about a man who was tasered, clubbed and committed by the police as a result of his epilepsy. In fact, pretty much all the top ‘world and business’ stories at the moment are about political scandals, anti-war, and anti-establishment news stories. If you use digg as the barometer of what the public really wants, then the front page of MarketWatch might look a bit different.

a new wave of innovation on the internet, an innovation focused not so much on new technology as on the way people are beginning to use existing technology…

Quite a reasonable way to begin to describe these new sites and services, I would say. A certain degree of vagueness is almost inevitable given the breadth of quite different services that are described with the 2.0 label.

There’s also a certain amount of conventional wisdom in place, I felt. The idea, for example, that because certain properties have raised a lot of money then we are definitely in bubble 2.0 conditions. The ‘huge amounts of money’ ‘thrown at’ web startups nowadays are often fairly small compared to the hundreds of millions raised for dotcoms in the late nineties:

From the business point of view, the defining feature of this new goldrush is that established companies are throwing huge amounts of money at upstarts who have three things in common: they have grown from nowhere with astonishing speed; they have no revenue stream to speak of; and most of their content is provided by their users.

He goes on to divide this new wave into two rough categories. There are collective sites — such as digg and Wikipedia — and personal sites, focusing on ‘me media’, such as MySpace, del.icio.us and flickr. He allows that there is a lot of blurring between the two. Flickr, for example, is not just a gallery of your photos, but of everybody else’s. The distinction is reasonably useful, though, and allows for an excellent gag:

One way of putting it is to say that collective sites are useful (except when they’re not) and personal sites are interesting (except when they’re not).

The piece continues to describe the ‘800-pound gorilla’ that is MySpace. I got the feeling that Lanchester fundamentally dislikes MySpace and other social networks, though its size means that it’s certainly a subject of some awe: “if it were a country it would be the 10th biggest in the world, just behind Mexico”.

The piece ends on a melancholy note. For Lanchester, the social networking phenomenon is symptomatic of loneliness rather than the celebration of connection that others might see:

Sit someone at a computer screen and let it sink in that they are fully, definitively alone; then watch what happens. They will reach out for other people; but only part of the way. They will have “friends”, which are not the same thing as friends, and a lively online life, which is not the same thing as a social life; they will feel more connected, but they will be just as alone. Everybody sitting at a computer screen is alone. Everybody sitting at a computer screen is at the centre of the world. Everybody sitting at a computer screen, increasingly, wants everything to be all about them.

If you’ve got the morning off, check out the interviews and profiles with some key players: Jimmy Wales (Wikipedia), Craig Newmark & Jim Buckmaster (Craigslist), David Sifry (Technorati), Caterina Fake & Stuart Butterfield (flickr), Evan Williams (Blogger/Odeo), Joshua Schacter (del.icio.us), Tariq Krim (Netvibes), Martin Stiksel (last.fm), Kevin Rose (digg), Sam Schillace (Writely) and Michael and Xochi Birch (bebo).

The grand social experiment that is sites like Digg and Wikipedia star[t]ed out with simple and noble ideals, in that order, but have steadily decreased in quality and competence to become a running joke, and home to the dregs of the internet. They are the domain of the disenfranchised stupid, the virtual corner bar for the loud portion of the ignorant set, and are quickly drowning out any voices of reason that try and counter the stupidity. Welcome to Web 2.0, short may it reign.

Needless to say, the evidence given is slight. The main problem with digg, apparently, is that two of Charlie Demerjian’s (the author’s) articles were removed after being reported as lame. Despite having received lots of intelligent comments, the author says this means that people who use digg are mainly “the disenfranchised stupid”. Since he thinks that they are “dumber than rocks”, it’s not entirely surprising that his articles annoyed loyal digg users, is it? I would suggest that he stops submitting his anti-digg stories to the service, unless this is some sort of elaborate trolling. Perhaps Netscape or reddit users might be a little more receptive?

Wikipedia is tarred with the same brush. Needless to say, though, no examples or other evidence are given to support the accusation.

I don’t think that even the proudest champion of Web 2.0 would claim that either of these sites are without problems. A lot of them are admitted by their owners, and have been covered here in earlier posts. The thing is, they are also quite good as they are, and are continuously evolving to become better.

We are in a period of experimentation — mistakes and false-starts are inevitable. The Inquirer’s comments are the equivalent of telling Edison to stop messing about with this electricity thing when his first light bulb popped.

As usual, the criticism is based on a misunderstanding of what the book actually says. It does not say that big groups of people make the best decisions. It says that they are likely to, under the correct conditions. The crowd needs to consist of people who are:

diverse
qualified
independent
self-interested

The interactions between the crowd needs to be carefully managed to avoid social factors distorting an individual’s best judgement. In addition, some problems — crossword puzzles, guess the weight of a prize bull, sports results, open-source software — are a lot more tractable to the approach than others — the most interesting news or the best pop album.

The old digg — which allowed bloc votes from groups of friends and pressure groups — fell down on more than one of these criteria. The book’s author, James Surowiecki, comments: “The thing that makes the wisdom of crowds work is lots of diverse opinions and independent judgments … Digg acknowledged it wanted more diversity of input.”

Personally, I think that at best digg can produce a front page that’s interesting to its typical user, which is fine. Similarly, the hit charts are only going to show what most people like, not necessarily what’s best for everyone. Problems like these involving qualitative judgements can only be solved when you have a crowd of people with similar tastes to you — which is why last.fm works for music recommendations and why a different news-voting community such as reddit or a CrispyNews group might be better for you.

Wikipedia is an interesting case and whatever problems it has aren’t going to be solved by tweaking an algorithm. I liked Jimmy Wales’ comment in the Wall Street Journal, though, that “…it is a misunderstanding to think of ‘openness’ as antithetical to quality. ‘Openness’ is going to be necessary in order to reach the highest levels of quality.”

Yesterday, Fred Stutzman posted something to revive my interest. He was talking about the moaning and groaning about the power of top users and the voting blocs around them. Essentially, he says the reason for this is because we need some way to sort through the thousands of stories submitted to digg. Users can’t read them all, a lot of them are spam anyway, and so we develop coping mechanisms.

One such mechanism comes through the ‘friends’ functions offered by the site. If someone becomes known to you for submitting the links you like to read, then it makes sense to make them your friend. You then check out the links they submit ahead of the random morass submitted by everyone else. Since, they’re what you like, you’ll vote for them too, won’t you? You may also have a sneaking suspicion that this earns kudos from your new friend. This becomes self-perpetuating since those users’ links will be promoted and so followed by the next generation of new users. The so-called voting blocs actually represent interest groups. Stutzman draws a parallel between digg top users and the blogosphere A-list: it’s a self-sustaining and naturally formed elite, he says.

If this is the case, and I think it might be, then the front page of digg actually becomes irrelevant to heavy users. Or maybe even a scoreboard for the clans to which they belong. They know that their friends will provide the enough of the best links to satisfy their hunger for new pages, and they’re a tried and trusted source. An experienced digg user presumably goes straight to their friends’ submitted, dugg and commented pages. The front page becomes a recruitment aide for the major groups and users.

Alex Bosworth commented that friends engage in tit-for-tat co-operation when it comes to diggs. He suddenly noticed that his 39 ‘friends’ — none of whom he’d communicated with — were voting for the same stories as him. As I’ve posted elsewhere, digg is both a social network and a news voting site. There’s a vested interest in voting for the sites proposed by your clan, since it means that the sites you submit yourself stand a greater chance of promotion. In some cases, such as where clans are formed from pressure groups, co-operation comes from the common interest of the entire group. Of course, not all digg users realise they are in a clan by having friends, but the end result may be the same as if they did.

I suppose that new users only see the front page, don’t know that there’s an oligarchy and simply expect the best links to float to the top. Of course, that isn’t true. The best links, the ones on the front page, are (a) intensely subjective and (b) will represent the interests of the most powerful groups. Fortunately, the most powerful groups represent interests diverse enough to ensure that population of digg isn’t decreasing (though it isn’t growing very fast anymore either).

This is self-perpetuating. New users will only return to digg if the major topics of interest are of interest to them. That means they are a potential clan member. It’s also a potential hazard. If only users in a clan can expect front pages for their submissions, then the emphasis on quality can become a lot less important than the emphasis on where it’s from.

In many respects, it simply doesn’t matter, though. Being featured on digg is a very temporary boost to ratings that won’t add much to your bottom line. People looking for interesting new articles and sites do not become regular readers, by and large. The difficulty, I suppose, is the position of digg among technology news sites…

Elsewhere: Ed Yourdon visited digg HQ this week and posted a great primer on the service.

This was the state of play on the front page at 16:25 BST today.

(Time means the number of hours since a post was submitted, to the nearest hour.)

Things to note? Your ranking on the digg site does not correspond any to the three metrics available to users. Nor any combination of them that I was able to concoct. I tried a lot of formulas, but nothing that worked. If the number of diggs was key, then the number one story would be on page 3 or something. All the front page stories have attracted a fair amount of comments, but there’s no correlation between that and their rank. Comments are good and diggs are good, but there’s no way of knowing how much. I could post some graphs at this point, but since there’s no visible relationship, there’s no point. It’s clear that each story has a time-to-live on the front page, but impossible to detect what that is.

However, we’ve learned that digg front page stories do appear to be submitted within the last day, with around 15 hours being the average between submission and the front page.

It makes sense for digg to use a secret algorithm for posts, one that isn’t easily available to users through any of the information they’re given. Otherwise, the solution for gaming digg would be publicised, get spammed and the service would lose its users.

What we don’t have is either the rate of diggs or the rate of comments. I think it would be fair to assume that the ‘G-Meter in 1 minute’ story, the number one story in the list at the time I recorded, gained either a large number of diggs or comments over the recent past. Otherwise, the number two story, and all the rest, would have a higher place. Rate of diggs or comments seems to be more important than their number, although both are important. Since this is about just one moment in time, I can’t comment on how quickly or slowly a post rises and falls dependent on that. However, this is a key indicator, I am sure.

So I failed to reverse-engineer the digg algorithm. I’m frankly not up to the job and I don’t believe we have the information available. So then I looked to a more folksy way to understand the page. Folksy is my forte. I tried to come up with tags that would categorise the stories I was seeing. I know this is not academically rigorous in any way. But this was how it panned out according to my own categorisation of what came up:

So all of these things are good. Again, it’s just one moment from the contantly circulating digg nexus. I wouldn’t want to draw too many rules from this that you couldn’t work out for yourself. Web, Major Vendors (especially MS & Apple) and Conspiracies seem especially good.

I look forward to future posts about ‘How To Beat Microsoft’s Planned Web Conspiracy About Melons’.

P.S. working out how ‘Friends’ or voting blocs might contribute to any of this is well beyond my reach. Alex has some thoughts on this. Thanks to David for the link.

P.P.S. Maths geniuses are welcome to the data here. (.xls file)

Metcalfe’s Law states that the value of a network grows as the square of its number of users. This graph shows what he means.

Metcalfe was working in telecommunications, so he’s thinking about phones and computers connected together. What this means is that when you have a new network and you don’t have enough members, its worth is lower than its cost. You need to reach a certain number of users before it becomes either useful or profitable.

Think about when mobile camera phones were first introduced. If you didn’t have friends who also had camera phones, then they weren’t very useful. That wasn’t good news for the operators either. They had to subsidise the phones till such a point that lots of people had them. So to begin with, more users increased the loss for the operators, because they were paying more money on subsidies than they were gaining on messaging charges. Only when they had sold a few million did they become profitable, as people started to send picture messages to each other on a regular basis. At that point, the operators could also drop the subsidies, as users began to demand a camera phone.

The same things would be true for other new communication devices. Owning the only fax machine in the world would be utterly worthless. When they become an interconnected network of millions of such machines, then they are invaluable. Or they were, until email came along.

When the number of people on the network reaches its critical mass then the law says the value of that network increases far faster than its costs. We don’t need to take this too literally. Metcalfe himself says that, “Metcalfe’s Law is a vision thing. It is applicable mostly to smaller networks approaching ‘critical mass.’ And it is undone numerically by the difficulty in quantifying concepts like ‘connected’ and ‘value.’”

In the era of Web 2.0, a large part of which is about networks of some kind, and the power of network effects, it’s interesting to try to apply this to some of the key players.

For digg, more people in the network adds value for users. If there were only a dozen people on digg, then it wouldn’t be much of news hub. Each additional user adds a lot of value up until the point that there is more interesting news than you can read. The extra users will find and submit more stories from more far-flung corners of the internet. Plus larger numbers of people voting means that the promoted stories that get to the front page will be more representative of what the larger population finds relevant and interesting. Of course, whether that’s a good thing or not, depends on how much you, the individual user, are similar to the average digger. The average digger will change over time as people join and leave the network.

For the owners of digg, though, the value of more users comes from what they contribute via ad clicks. I see no reason why a site’s Click-Through Ratio would change at all, no matter how many users it had. The same thing goes for any other ad-supported site, unless there were a mechanism to target ads more precisely depending on the individual user’s profile. (Why do you think the search engines want to push ‘personalised search? To be able to better target their advertising.)

On flickr, the value of more users depends entirely on how you use it. If you use it to share photos with your friends, then all you really care about is that your friends are able to connect to the site. It doesn’t matter at all if there are 20 users or 20 million. On the other hand, if you’re using it to find photos on a particular topic or to look at pictures, then the more the merrier.

With MySpace and other social networks, again more is better. Ideally, you’d like to connect with all your friends. If they aren’t on MySpace, then that’s a pain, if you’re using it as your main communication tool. That’s why the bigger networks continue to get bigger and the smaller ones fade away, unless they’re for a niche audience. Once your friends are on, then the value of the network is enormous. If you’re seeking new friends with similar interests to you, then the chances of doing that are far higher if there are many users. The network effect multiplier — the extent to which extra users add value — depends on how you use it. If you only want to talk to your existing social group, then the other 99,999,990 users are an irrelevance.

Lastly, Google Calendar. Again, it depends entirely how you use it. If you go in for sharing calendars with family, friends and colleagues then, like a social network, it adds value when all those people are also users. If you use it as a personal diary, then it doesn’t matter at all.

So the law applies to Web 2.0 when each new user does have the capability of adding value for the existing users. And that is during the period prior to that site or service’s critical mass. For the individual user, the critical mass might actually be very small — their school friends, for example. For other networks and uses, then the number could be much larger — flickr had to get thousands of users before it became a good place to search for pictures, for example. Once the critical mass is achieved, then the additional value offered by more users may well not be so great as it was before that point is reached.

For site owners whose model is advertising, there’s no real difference from Web 1.0. The value of more connected users is directly proportional, rather than exponential, because the Click-Through Ratio won’t change. However, the ability to sell more lucrative, brand advertising instead of Google Ads will only come after the number of users has reached critical mass. There’s a step-change in value at that point which owners hope will lead them into profitability.

Well, anyway. Here’s what I managed to get.

Can you give me some facts and figures about digg? Number of users, number of registered users, average visits per user, postings per day, comments per day? Number of staff? Startup costs?

Digg has approximately 475,000 registered users (you need to register to participate in the voting process). There are 4100 stories submitted every day as of 8/11/06, of which perhaps 40–50 make the front page. Right now, the digg workforce is 15 people strong. As for startup costs, digg was very lucky to receive interest from many venture capitalists, and so we were in a position to choose who we took money from. One note about starting up is that having a presence on the Internet costs less today than it did two years ago. Bandwidth, servers and the other necessities for a Web presence are a fraction of the cost than a few years back. I doubt this could have been done several years ago without going to a VC first and getting that start up capital and building it from that point.

What was your revenue for the last year? Projected revenue for this year?

We cannot comment on digg’s revenue at this time.

Any other sources of revenue aside from advertising? Any planned?

Right now we’re driven by Google AdSense ads, and we also have a partnership with Federated Media. We feel pretty strongly about not bombarding users with ads, so we’re trying to be as non-invasive as possible

To what do you attribute the success of the site?

Digg’s success lies in the democratic collaboration of its users, also known as web democracy. It wasn’t any type of business when it was first conceived. It was just an experiment that took off. There were others out there that were attempting similar things, but others didn’t come together like digg did. I’ve seen over 200 digg clones since we launched, some backed by billion dollar corporations –but they don’t get it. To succeed you need to innovate, not just duplicate someone else.

In what respects is digg a Web 2.0 site/service?

One part of Web 2.0 the really fascinates me is social open sharing of information. For the first time, masses of users are getting together to perform useful tasks online. And digg is a huge part of that. Not only can you read the stories your friends are interested in and talk about them, but digg itself really came into prominence because networks of friends spread, through word of mouth, that digg was the place to go.