The Social

NEW YORK--You had two options if you wanted to hang out with Digg founder Kevin Rose at the Web 2.0 Expo conference this week: head over to the lobby bar of the trendy Standard Hotel on Monday night, where Digg was picking up the tab for several dozen of the city's blogger elite; or pack into Manhattan Center Studios on Tuesday night along with about a thousand other young, predominantly male New Yorkers for a live taping of Rose and co-host Alex Albrecht's "Diggnation" video show.

Geek heroes: Jay Adelson (left) and Kevin Rose in a screenshot from one of their regular 'Digg Dialogg' videocasts with Digg users.

Those are, after all, the two Diggs. There's Digg the company, the name that first put "social news" into the mouths of New York media both old and new, the BusinessWeek cover story that established the shaggy-haired Rose as digital media's poster boy, the start-up that was once talked about as a huge acquisition target for the likes of Current Media, News Corp., and even Google amid CEO Jay Adelson's coy insistence that it wasn't for sale. But then there's Digg the brand: haven for the wackiest of the Web, with a front page dominated by anything Apple, oddball science, insidery tech and politics news, and the latest YouTube sensations. It's a dual identity that seems to be tough for the industry, or the five-year-old company itself, to reconcile.

At the Web 2.0 Expo, both Diggs--and the tension between them--was on full display in a dual keynote by Adelson and Rose on Tuesday afternoon. And the executives were both vocal about the fact that Digg has got to change.

"We're about 40 million users today, (with) about 20,000 submissions a day going into the Digg system," Adelson said onstage. "It's certainly achieved huge things for us. It's what we've set out to do, but we have a ways to go."

Rose added, "We've pretty much stayed the same over the last couple years."

There's a revamped Digg coming, a complete overhaul using the Cassandra database management system, which was developed and then released as open source by Facebook. In the new version will be "instant Digging" that doesn't require registration or a login, better filtration of topics to fit any number of niche interests, and a "smarter" way to gauge story popularity so that both the number of "diggs" and the number of times a link was submitted in the first place are taken into account.

Adelson told CNET later on Tuesday, just outside the auditorium where hundreds of rowdy young Diggers were awaiting Rose and Albrecht to walk onstage for the live Diggnation taping (a co-production of Revision3, the video outlet that Rose and Adelson also co-founded), that this will arrive in the first half of next year. "I can't say with certainty when, because there are so many infrastructure components that have to come first," he said.

This talk of change and versatility is exactly the message that the San Francisco-based Adelson and Rose want to convey while they're visiting New York, the center of the global publishing industry. This is Digg the media company on parade, the Digg that picked up the tab for the cocktail-swilling media insiders at the Standard on Monday night; and this is the Digg that's taken a bit of a beating recently. True, its traffic isn't plummeting, and by most measures continues to grow at a decent pace, but as a news-sharing destination it's been eclipsed by both Facebook and Twitter.

Digg's once-gossiped-about valuation may have taken a hit simply because the market for social news has grown so saturated, and as a result the company is no longer a novelty. Take third-party Twitter app TweetMeme, for example, which takes the links shared all over Twitter in "retweets," and compiles them into something that looks an awful lot like Digg. Or the likes of Yahoo Buzz, which haven't proven to be as popular or ubiquitous as Digg but which proved that it's not particularly difficult to build your own social news service.

"It makes me very proud," Jay Adelson said of the Digg influence evident in TweetMeme buttons and, now, Facebook sharing buttons. He added, "I think that the sophisticated publisher understands the difference between sharing within a social network, sharing on Twitter, and sharing on Digg."

Influential, sure. But when it comes to making a lasting footprint in the media world, Digg hasn't yet been able to get past the common wisdom that the footprint in question will be from a beer-soaked Converse All-Star. And that's the Digg that was showcased on Tuesday night as Rose and Albrecht, both in trendy fitted plaid shirts, received a rock-star welcome for Diggnation.

More than a thousand people had showed up at the Manhattan Center Studios venue, a smaller crowd than the show's last taping in New York, but a company rep pointed out that the previous taping had been in the summer, and this one was on a school night. Someone in the audience excitedly waved a sign that said "WINDOWS 7 FTW!" (That's "for the win," in case you stepped in late.) Another sign read "I SKIPPED CLASS FOR THIS!" and still another, which Rose and Albrecht seemed especially proud of, was a green sign that read "GO HIPPIE!" with a massive, hand-drawn marijuana leaf.

Adelson says that the company's merry band of fanboys--yes, most of them are male--doesn't get in the way, strategy- or image-wise.

"Our core Digg enthusiasts frankly provide a tremendous amount of our feature ideas and feedback, and are the ones that we can count on to be there even when we screw up," Adelson told CNET on Tuesday night. "I don't think they hold us back. I think that's the power of the product."

Kevin Rose's essential Diggnation props: Mac laptop, open bottle of beer

(Credit: Revision3)

There have been some good signs. Adelson says that Digg's experimental advertising system, in which unpopular ads are penalized with higher costs ("We charge the advertisers more money when their ads start sucking," Rose explained in the Web 2.0 Expo keynote) have been a runaway success. The company also absorbed a Rose side project, Twitter directory WeFollow, which could have interesting implications.

Their mission is still precarious. The hordes of Digg loyalists propelled the company to fame, but they're known to be volatile: if they hate something, they'll make it obvious. In 2007, when Digg pulled down a number of news links in response to a cease-and-desist complaint (the links directed to instructions for cracking a digital rights management code in the now-defunct HD DVD format), avid users flooded its system with even more links to the code. Digg admitted defeat, and restored the censored links. Earlier this year, when a new URL-shortening feature called the DiggBar garnered a negative reaction, the company made some significant modifications. If they don't like the yet-to-be-unveiled Digg revamp, it could get really ugly.

But perhaps the most difficult part of Digg's dual-identity wrangling is the fact that the company's executives and figureheads really do seem to have an affinity for its mischievous roots. Take Tuesday night, when a few excited audience members at the Diggnation taping started waving around the pink tickets they'd received from local cops for downing booze while waiting in line outside to see the show.

"Open container in line? That is awesome!" Rose exclaimed, reaching for one of the tickets and displaying it in front of the crowd.

Co-host Alex Albrecht chimed in. "You should get that framed!"

LOS ANGELES--Already the far-and-away leader in search, Google wants to be a big player in music discovery, too.

The pop-up MySpace player that will appear when clicking the 'play' button in a Google search.

(Credit: MySpace)

The search giant teamed up with News Corp.'s MySpace and streaming service Lala for the Wednesday debut of the new Google music search feature at the historic Capitol Records building in Hollywood. With the new music search, which had been internally code-named "OneBox" when news of the project broke earlier this month, search queries pertaining to something like a song, artist, lyrics, or album will bring up links to streaming songs from iLike and MySpace, as well as links to artist information on Pandora, Imeem, and Rhapsody. The lyrics search is provided through a partnership with Gracenote.

"It is directly embedded and integrated into Google search. There's no special button to push," R.J. Pittman, director of product management for search properties, said in a phone interview with CNET News. Currently, due to licensing and availability issues, the music search is U.S.-only.

There also won't be direct download links in Google: those will be handled through Lala and MySpace. "We push all the music engagement and commerce down through the partners," Pittman said.

Additionally, if a relevant music video is available, the MySpace window that pops up when someone clicks on the "play" button in search results will display a link to that video through MySpace's new music video portal. That's interesting, considering music videos are some of the most popular content on Google's own YouTube--but YouTube video results will continue to show up independently of the new music results in Google searches.

Financial terms of the partnerships aren't yet clear. "Everyone's keeping their own revenues and we're not messing with anything," Lala founder and Chairman Bill Nguyen told CNET News. But MySpace Music President Courtney Holt was a bit more tight-lipped, saying "we're not discussing the financial details."

The MySpace deal is a little more complicated to begin with, though. Google had been in talks with music start-up iLike about integration into music search, but then iLike was acquired by MySpace in a deal that closed earlier this month. Indeed, a statement from Holt says that "this relationship was secured and implemented by the iLike team." But iLike founder Ali Partovi (who's currently on board MySpace's music team) explained that the partnership now has "MySpace branding, (and) MySpace content licensing." Through the integration of iLike's technology, it'll also have concert notifications if someone searches on Google for a band that's currently on tour.

"I think MySpace, along with (Apple's) iPod, is one of the most trusted brands in music, one of the most resonant to consumers," Partovi said. MySpace is also reported to be in talks with Microsoft to power a music feature on MSN.

Music search is something that Google could really dominate. According to traffic firm Experian Hitwise, 6 percent of Google's top 1,000 search-related terms deal with music, and already 30 percent of traffic to sites that Hitwise classifies under the "music" umbrella comes from Google.

Considering Google's reach, it's a big win for both MySpace, currently struggling to redefine itself as a pop culture powerhouse rather than a social network through its MySpace Music service, a joint venture with major and independent record labels, and Lala, which also has a new song-gifting deal with Facebook. "We think (Google's music search) going to have a thousand percent increase in our sales, an order of magnitude more," Lala's Nguyen told CNET News.

This also means that music-related search results are getting a sheen of legitimacy on Google. With official partnerships, Google's most prominent music search results will be from sites that have licensing deals in place with the major labels, rather than potentially pirated content. Google's history with the music industry is spotty at best: it's had to strike its own deals with the major record labels, and relations haven't always been positive. Music search puts it all into order, partners in the deal say.

"Instead of ending up with a pirate site and a page with a bunch of ads or random lyrics sites, you wind up with a play button," Nguyen said.

Updated 4:30 p.m. Just after Google and Lala made the announcement official (in what was probably not a coincidence) Yahoo released a blog post designed to point out that they've been offering this kind of music search for a while. "We've made it easier to find music videos, artist information, and play full length songs from within the search results page. This is just one of the many ways Yahoo! is enhancing the search experience for music lovers," said Larry Cornett, vice president of consumer products for Yahoo Search.

SAN FRANCISCO--With both MySpace CEO Owen Van Natta and News Corp. chief digital officer Jonathan Miller taking the stage at the Web 2.0 Summit this week, there was naturally plenty of talk about the social site's attempt to reverse its ill fortune of late. Once the biggest name in social networking, it's long since lost that title to Facebook and is trying to reinvent itself as a destination for music and entertainment.

"I think that what you see in the space more than anything else is if you don't keep innovating and moving forward you get in trouble," Miller said in his talk on Thursday morning. "You can't stop, you have to keep going, and (MySpace) didn't keep going, it kind of stopped."

And in that time, he added, "we had two fantastic competitors emerge in Facebook and Twitter."

The previous day, Van Natta made his first big appearance on the conference circuit since he joined MySpace and was tasked with a major turnaround. Van Natta unveiled a new music video hub as well as an enhanced set of marketing tools for music artists--some of which were built in with technology from iLike, which MySpace acquired this summer.

And on Wednesday night, the "new" MySpace was out in full form: a line snaked down three city blocks when music fans caught wind of the fact that the company had booked rock band Weezer for one of its "secret shows" concerts.

"MySpace started with an essence around certain things, and one of them was music, and meeting new people," Miller, a former AOL exec who also joined News Corp. this spring, said on Thursday. "We're going back to basics in that sense, but you've got to make it relevant to today and going forward."

It's obviously too early to tell whether the "reinvention" will work. Some critics say that it's too big of a task, especially given the state of the advertising market. But Miller spent a big portion of his talk at the Web 2.0 Summit hyping up the Fox Audience Network, or FAN, the digital advertising division that News Corp. first announced last spring.

"We kind of broke it out of MySpace and gave it a life of its own," Miller said. "We're just at the beginning of a coming-out party for FAN."

FAN just inked a deal with agency giant Omnicom, and more are on the way, he added. Miller also said FAN is the fifth-largest ad network on the Web, after the usual suspects--Google, Microsoft, Yahoo, and AOL--and that it's hoping to get into fourth place soon.

SAN FRANCISCO--He's not kidding about making changes.

MySpace CEO Owen Van Natta took the stage at the Web 2.0 Summit event on Wednesday and paraded out a whole slew of announcements related to turning the flagging social network into a music and media powerhouse. He showed off a massive catalog of music videos--coming from all the partners in the MySpace Music joint venture--and an enhanced set of tools for bands using the site as a marketing and promotional hub. Plus, the MySpace Music service now syncs up with Apple's iTunes, not just Amazon MP3.

It was former Facebook exec Van Natta's first big public appearance since becoming CEO of the News Corp.-owned MySpace in April.

The "artist dashboard" for MySpace Music is a free product that offers a suite of analytics for bands and artists that operate MySpace profiles so that they can get details on who's listening and interacting with them within the MySpace community. It's also baked in features from iLike, the music service that MySpace acquired this summer. iLike operates social apps on a variety of platforms, including Facebook, and artists using MySpace can now access that data too.

"We're giving people things like geographic breakdowns, where exactly their friends are not just in the U.S. but in the world," Van Natta explained. "This is literally getting pushed live as I'm sitting here talking to you."

For the fans, there's the music video portal, which started rolling out on Wednesday, offering the entire catalog of music videos from all the labels that offer their music on the MySpace Music streaming service. It'll compete with Vevo, the Universal Music Group-founded music video hub that features YouTube-created technology and investment backing from Abu Dhabi oil money. But it sounds like Universal's music videos will be on MySpace, too.

CNET News reported earlier this month that MySpace was working with video hub Hulu--in which News Corp. is a stakeholder--to launch a new video service. It's unclear whether there is any connection to the new music video hub.

MySpace launched the MySpace Music operation last year and hired former MTV executive Courtney Holt to head it up. But things haven't been altogether sunny. Earlier this year, word got out that the major labels who've put a stake in MySpace Music were dissatisfied with its performance.

Plus, earlier on Wednesday, it came to light that rival Facebook was making its first big move in the music space. The massive social network announced a partnership with music service Lala as part of its revamped virtual gifts marketplace, allowing members to buy songs for one another.

Van Natta shrugged off concerns that MySpace, with a significant portion of its traffic eaten away by Facebook's rocketing growth, is having trouble pulling in advertising revenues.

"We're really good at monetization," he assured the audience. "There's a lot of different avenues that we can take."

This post was expanded at 4:54 p.m. PT.

One piece of 'Balloon Boy' fan art took the iconic poster that hangs on the wall of Agent Mulder's office in the sci-fi series 'The X-Files.'

(Credit: FullBleed.org)

Two years ago we asked the question: Could the mass hysteria of the 1938 "War of the Worlds" scandal, in which a Halloween radio drama orchestrated by actor Orson Welles was mistaken for a real announcement of Martians landing in New Jersey, still take place in the Information Age?

The answer: Yes, it could. And it happened this week.

Like millions of Americans, you were probably glued to your computer watching some news outlet's live video stream or hitting refresh on Twitter for updates on "Balloon Boy," the twisted saga of a 6-year-old Colorado boy who had allegedly floated away in a flying-saucer-shaped helium balloon that his parents had built. Was he alive? Had the helium suffocated him? Had he, heaven forbid, fallen out of the balloon?

And the media flipped out.

"This Is Wrong: A Six Year Old Child Could Die On Live Television," industry blog Mediaite warned. Keywords related to the missing kid started to dominate Twitter's trending topics. More details started to pour in: the boy was revealed to be Falcon Heene of Fort Collins, Colo., whose parents were avid storm-chasers and whose family had appeared on reality show "Wife Swap." Audiences grew captivated as the whole situation became weirder and weirder.

Thankfully, "Balloon Boy" was safe. But rather than being dramatically rescued from a flying saucer in an uplifting ending worthy of the "Miracle on the Hudson," it turned out that he'd been in a box in his parents' attic the entire time: and then the really weird details began to emerge. The family quickly hopped aboard the TV news circuit, and not only did little Falcon blithely say "we did it for the show" on "Larry King Live," he proceeded to puke on two network morning shows. Later in the day, the Business Insider floated a claim that a former video intern for the boy's father, Richard Heene, was attempting to sell evidence that the entire affair was fabricated for a TV show. (This has not been proven whatsoever.)

It's annoying. It's annoying that the whole thing could have been an attention-grabbing stunt. It's even more annoying that hours of workplace productivity were slurped down the drain by streaming-video footage of a wacky silver balloon that didn't actually have a traumatized 6-year-old on board like we all thought it did. Likewise, it was probably pretty darn frustrating back in 1938 when scores of Americans realized that they'd mistaken a "War of the Worlds"-themed radio drama for a real emergency broadcast--especially for the people in the New York and Philadelphia metro areas who reportedly fled their homes in panic. (Try to explain that one to the neighbors.)

But maybe this cloud (balloon?) has a silver (tinfoil?) lining. Much has been made recently of the death of "watercooler" media: the TV show everyone is watching, the news story everyone is following, the topic that the whole world seemingly can't stop talking about. The Internet's ability to slice and dice culture into niches and easy-to-follow subcultures was supposed to more or less destroy that. Yet we had another "War of the Worlds": something weird and bizarre that made us all completely freak out like spooked chickens.

For better or for worse, just about everyone on Thursday was talking about "Balloon Boy." They were worried about him. They were incessantly searching Google News for any kind of update. They were cracking snarky jokes and wondering if it was "too soon." They were biting their nails when a photograph started to circulate that seemed to show an object falling from the silver saucer balloon. They were relieved when "Balloon Boy" was found safe. And they were angrily cursing themselves and the national news media when it became clear that the whole thing could have been fabricated. This was the news story that disproved our cynicism over the viability of true, mass-media phenomena in the Digital Age. In fact, it was the tools of the Web--streaming video, Twitter, news aggregators--that made "Balloon Boy" into the sensation that he became.

And honestly? If we have to look like gullible idiots, we might as well all be in it together.

(Credit: Ustream)

Twitter was bombarded on Thursday afternoon by the shocking news that a six-year-old boy had climbed into a homemade hot-air balloon and taken off over Colorado--the microblogging service's timeline temporarily slowed to a crawl and its trending topics were filled with tags like Colorado, Denver, and #balloonboy.

He was never actually in the balloon, apparently: CNN reported later on Thursday that he was found, safe, hiding in a box in the attic of his family home.

Live video streams from news outlets' helicopters showed the saucer-shaped balloon speeding through the air and then making a relatively soft landing. But then those same news outlets began to report that there was no one inside--sparking even more debate and speculation on Twitter.

My colleague Stephen Shankland ran a test and found that in a 30-second span, 836 tweets mentioned the word "balloon."

The boy reportedly lives in Fort Collins, Colo., and the balloon was built by his parents, who are avid storm-chasers.

It surfaced somehow amid the Twittering mess that the family had appeared on reality show "Wife Swap," and a video of its three sons singing a rap song has begun to rack up views on YouTube (mildly not-safe-for-work due to lyrics).

This post was updated at 3:17 p.m. PT.

Hot on the heels of its appointment of a chief technology officer last week, News Corp.'s MySpace on Monday announced that Mark Rosenbaum has been hired as its chief financial officer.

Although the appointment marks the first time that the social network has had a CFO, it is Rosenbaum's second stint at News Corp. He headed up financial operations at Gemstar-TV Guide International, when it was owned by the Rupert Murdoch-helmed conglomerate. More recently, Rosenbaum served as a consultant to MGM.

Mark Rosenbaum's MySpace profile picture.

(Credit: MySpace)

In his new position, Rosenbaum report directly to Owen Van Natta, the former Facebook executive who became MySpace's CEO in April, after the departure of co-founder Chris DeWolfe.

Less than two months after Van Natta's hiring, MySpace announced a layoff of nearly 30 percent amid stagnant growth and what was increasingly a losing battle against Facebook in its quest for social-networking dominance. The company called its aim at financial efficiency a "return to start-up culture."

Hiring a chief financial officer is, as a result, a logical step.

"Having led companies at every stage of their development, Mark understands both start-up culture and mature businesses, and is well-suited to guide MySpace's financial organization through its next phase of growth," Van Natta said in a release announcing Rosenbaum's hire. "We're thrilled to add someone with his pedigree and experience to the team."

Citizen news site NowPublic has been sold to another company in the "hyperlocal" space, Examiner.com, the two companies announced Tuesday.

The two sites will operate independently, but Examiner will integrate NowPublic's technology into its site and will encourage NowPublic's contributors to also write for Examiner--right now, the buyer says it has grown 200 percent since the beginning of the year (it launched in April 2008) and has 15,000 active contributors, hoping to hit 30,000 by year's end.

NowPublic's executives, including CEO Leonard Brody, will join the management team of Clarity Digital Group, parent company of Examiner.

"Every day, we hear discussions about whether hyperlocal content will ever be scalable, sustainable, or profitable as a business entity," Examiner CEO Rick Blair said in a release. "With the acquisition of NowPublic, we have the technology to further engage our community of more than 17 million unique visitors per month, and distribute our stories in new and innovative ways."

Was this a bargain-basement acquisition? The companies did not disclose financial terms. But an insider in the space told CNET News that NowPublic had been shopping itself to some pretty big media companies for some time at a higher price than potential buyers were willing to pay. The company had raised about $12 million in venture funding.

Many media companies have simply been launching their own "citizen journalism" initiatives, like CNN's iReport and blogging experiments from newspapers like the Washington Post, which could make an exit tougher for the smaller players.

Digital-media companies like AOL and InterActiveCorp have also made plays to dominate the local-news market--AOL recently acquired local-focused start-ups Patch and Going, the former of which was already a personal investment on behalf of CEO Tim Armstrong, and the Barry Diller-run IAC has been placing a big emphasis on business directory Citysearch.

Facebook has partnered with liberal news outlet The Huffington Post in an officially sanctioned implementation of its Facebook Connect product.

Called HuffPost Social News, the new site aggregates Huffington Post stories that a given user's Facebook friends have recommended or commented on, and shares the user's Huffington Post activity on their Facebook profiles in turn.

It's a concept fairly similar to TimesPeople, the sharing service that The New York Times launched last year.

"Our goal is to make HuffPost Social News the go-to place for Facebook users to share news--both the stories they love and the stories they hate--with friends," Eric Hippeau, Huffington Post's still-new CEO, said in a release. "It should also appeal to marketers interested in reaching passionate, savvy readers who care about the news and who want to share their interests with friends."

This use of Facebook Connect is unusual because Facebook typically does not undertake many official partnerships with third-party sites when it comes to its developer APIs. And this particular partnership may come under some scrutiny: The Huffington Post, which began as a political news site and has since expanded into many other areas of coverage, is controversial--not only in terms of its partisan leanings (it was co-founded by left-of-center pundit Arianna Huffington) but because the majority of its bloggers are unpaid and because some critics have argued it relies too heavily on third-party content that it doesn't always pay for.

But the social network's executives appear to have given The Huffington Post their stamp of approval, at least when it comes to the site's model for news consumption.

"The Huffington Post has led a revolution in how people discover and consume news," Facebook Chief Operating Officer Sheryl Sandberg, herself a veteran of the political world, said in a release. "With the integration of Facebook Connect, HuffPost Social News is now leading the way to make news even more of a social experience, giving people new ways to share and filter news and current events through their networks of friends on Facebook."

Facebook likely hopes that this partnership will be a sort of example to the news industry--which is obviously looking for some new ideas right now--and that other media outlets will, in turn, build similar products.