Will a New API Make Digg Profitable?

Significant changes to Digg’s Application Programming Interface (API) promise to open up new possibilities to third-party developers, and might even make them some money.

Last week Digg announced some important changes to the policies that govern what sorts of things third-party Digg application developers may do. The changes lift old restrictions on certain Digg app functionalities and present new options to developers, giving them the freedom and flexibility to create programs that interact with the social networking site in ways not possible before.

There are a few differences between the old Digg API and the new. First, developers no longer need to get permission from Digg to make applications that make use of the site’s content. Also, third-party developers may now charge for access to their apps and make use of ads. Essentially, third-party Digg application developers are now free to make applications on their own without oversight from Digg, while profiting from them, which means we can expect a lot more Digg apps competing for users’ interest in the near future.

Third-party developers now also have developer’s access to the Digg search engine, allowing them to make use of all the particular Digg search functions in their apps. Along with access to Digg’s search functions comes access to users’ favourites, allowing third party apps to make novel use of info about which stories are most popular among Digg users. Essentially, third party Digg application developers may now make use of the most crucial information about Digg stories, so we can expect plenty of applications in the future that give users new insight into the trends and popular topics of Digg.

Finally, third party Digg apps can now participate in Digg just like a normal user. Users may vote up , bury, comment on, and favourite stories through third party apps. Formerly third party apps could only watch the digging action from afar and were powerless to affect the Digg world.

The bottom line is that the new Digg API will allow for the creation of Digg applications that will give users a new level of interactivity with Digg stories. With unprecedented access to essentially all the information on Digg, it is easy to imagine that many apps will make full use of that info to glean as much of an understanding of the mysterious Digg popularity algorithm as possible, giving users the ability to understand and contribute to popular Digg stories more effectively than ever before. Applications like Sub Digger will no doubt benefit a great deal from the new API.

A couple questions arise about this change though. First, will this shift the balance between those users with a great deal of influence and the average Diggers? Digg has long had something of a problem with so-called power users. The idea is that some users have so many influential friends and such a tight grip on the pulse of the Digg community that the majority of their stories make it to the front page — the hallowed halls of Digg where continued success is guaranteed.

Sometimes this popularity is even detrimental to average users of Digg, who might post a story earlier than a power user, only to see that their own story has floundered while the power story has gained a truckload of diggs, due to the power user’s influence. For some it is a frustrating trend that runs counter to the communal, semi-democratic character of the social networking site.

It’s easy to imagine that these new developments to the Digg API could make the power users’ job even easier, further cementing their status as top Digg users. With applications that give novel, and possibly even better, access to and understanding of critical Digg information comes a better grip on control over Digg stories.

But of course this might work both ways. Average users will also have access to many of these apps, giving them the same competitive Digg advantage that the power users have, evening out any benefits gained. New third party apps might even give the average users, who formerly didn’t have much at their disposal to help them with getting digged up, a new tool to compete with power users.

It’s hard to say exactly what will happen, although I’m inclined to say that any advantages given will likely benefit the power users more than the average users. They are called power users after all, and are more likely to take full advantage of whatever is available to make Digging easier, while the average user is more likely to continue using plain old Digg as a simple pass-time, not worrying themselves with the complexities of the Digg hierarchy. But perhaps these new apps will make it easier for the average user to become a power user, giving them access to all the information and tricks that were formerly exclusive to power users. Only time will tell.

But the other obvious question is: will this make Digg profitable? This seems to be a conscious move on Digg’s part to open up the site to a wider market, essentially making a small industry in which developers can focus on making money off of Digg applications. This is reminiscent of the iPhone third-party app model, in which developers can make money for themselves while simultaneously increasing the desirability of the iPhone among consumers.

The short answer to the question of profitability, unfortunately, is no. The difference between Digg and the iPhone is that the iPhone costs money. Third party app development encourages people to buy the iPhone, whereas third party development for Digg will only encourage more people to use Digg for free more often. At best, third party developers will make money off these apps, but until Digg figures out a money-making strategy, which has eluded them until now, it will remain unprofitable.

But in the long term the answer is a bit more optimistic. Digg’s choice to make these changes to its API seem to mirror the strategy of the social networking powerhouse Twitter. Twitter has long allowed development of all kinds of third party applications, letting users make use of Twitter however they feel with whatever app they feel, not just through the Twitter site. Third-party Twitter apps are so integrated into the service that the submitted through X application signifier is tagged onto every post, allowing users to see what third party app was used to make a tweet. (I can’t believe I just wrote the word “tweet.” Forgive me.)

Essentially, third party development has allowed the outside world to improve upon Twitter, making it all the more popular. Mind you, Twitter has yet to make any serious money either, but building massive popularity and a cottage industry around third party Twitter apps can’t be a bad place to start when trying to become profitable. It would seem Digg is trying to do the same, which in the long run may pay off.

In the end, this is probably a smart move on Digg’s part. By making Digg more accessible, improvable and open, it is attracting not just more users who will make use of third party apps, but a whole slew of developers who will now be dedicated to working on the networking service while making some money of their own. Essentially, Digg will hopefully be able to build another whole community besides the one that already exists, out of application designers and marketers.

And if it all works out, we can finally see the website that brings us important news — like caterpillars who need a haircut — become profitable.