Jason Calacanis says that Digg's top contributors are taking payola:: "A PR/marketing firm confirmed with me that they had a number of the top 50 users on digg now on the payroll--and this wasn't a totally insignificant firm."

Calacanis is not exactly an unbiased source. Until recently, he was at Time Warner, where he headed up an effort to turn the Netscape.com portal into a Digg lookalike -- except Netscape.com, unlike Digg, would have paid, on-staff editorial oversight. So, of course, Calacanis adds: "My prediction is social news sites without a paid staff of editors cleaning the site up will be less trusted than ones with editorial staffs."

deep jive interests discussed the issue) a few days ago. The blog points out that payola is a natural outgrowth of Digg's management philosophy: They don't pay the top participants in their community. Some of these guys are spending huge amounts of time finding and promoting stories on Digg. The company head honcho, Kevin Rose, says he thinks that paying some participants would create an unfair sense of hierarchy -- but that hierarchy already exists. Some people at Digg have a lot of mojo and their submissions frequently make it to the Digg home page. Others, not so much.

deep jive interests says:

Jason Calacanis, lately of Netscape, has clearly shown that all other things being equal, when given the option, people would rather be paid for their work. Or at the very least, recognized in some small way for the contributions to the site.
(As an aside, Kevin Rose has also gone on record about top diggers being recognized in other non-monetary ways, but this has yet to materialize)"

Download Squad also predicts problems for Digg, saying the site is "destined for failure." The reason? Digg drives lots and lots of traffic to the sites it targets. That's great now that the Web publishing model is driven by pure traffic. Advertiser-supporter sites (like ours) generally prosper as long as their page-view numbers are high. But that's going to change, says Download Squad -- advertisers will start demanding payment for clickthroughs, rather than page views, or else they'll look for some other proof that readers are interested in their products. And that'll be Digg's downfall -- "digg users are not valuable for a site that relies on advertising clicks to generate revenue, since they drop by for a cursory look, then head off looking for another distraction." Eventually, sites will come to see traffic from Digg as a cost, and start blocking referrers from Digg.

Download Squad also says that Digg is slanted toward entertainment news rather than real news, and that Digg users in general are looking for cheap entertainment. For example, while startups are popular on Digg, Digg users don't translate to customers -- they'll try a beta product, give up on it, and move on.