Layoff-driven journalism: "Let's expose all the patterns in the media! It'll be great for us! Don't forget to link to our previous coverage." Owen, please listen to what readers are telling us: Bury, bury, bury.

In "King of Digg," GangstaDawg4Life takes on FroggietheDestroyer! This is the future of media. Kevin Rose conceived Digg, his so-called social news site, as an experiment in democratizing the consumption of news. Rose's formula: Get rid of middleman editors. Replace them with the wisdom of crowds. Or so he says. But while he was starting Digg, Rose was a TV host on G4TV, the cable channel about videogames. That's the secret of Digg's success: It's a videogame. An old-school journalist would wonder: "Why do they keep score on individual submissions? Doesn't that reveal which of your stories were believed most, or at least read most? Damn, there goes my Pulitzer!" But now, Rose and company are fighting with Digg's most active users, trying to blunt their success. Here are five reasons — from a 13-year veteran of MSM formulas — why Digg's management should hug their top Diggers even tighter.

"Anyone out there who would like to talk about a book contract, I think I have some compelling material, given the right deal," trolls Owen Byrne, who left Digg for the presumably more stable workplace at TravelPod, a travel-blogging site launched in 1997 and now part of the Expedia network of sites. Book agents, Byrne's full pitch after the jump. No fighting!

The whispers have started: How much money did Kevin Rose make personally by selling shares in Digg's latest round of VC funding? The talk that Rose has sold shares is driven by equal parts envy and admiration. To understand the reaction, it helps to realize that the notion of an entrepreneur selling his own shares directly to investors before a public offering — getting out of the company just as other investors were getting in — used to be taboo in Silicon Valley. But that was before Wall Street's IPO machine broke down, and before merger activity dried up. Rose is at the vanguard of a seismic shift in how the Valley pays off its entrepreneurs.Rose, whose stake in Digg was famously estimated by BusinessWeek as worth $60 million, may be a unique case. More driven entrepreneurs must be frustrated by Rose, the fun-loving rock climber, on-screen beer drinker, and legendary lothario. His company's rise has seemed effortlessly successful, driven more by the former TV host's fan following than Digg's innovations. But Rose has gotten good business advice, chiefly from Digg CEO Jay Adelson, a longtime friend. Adelson feels he gave up too much control to investors at his previous company, Equinix; he strove to protect Rose from the same fate, an effort which Sarah Lacy chronicles in her recent book, Once You're Lucky, Twice You're Good. As a result, Rose still holds a substantial stake in Digg. Rose is already believed to have taken $1 million in a previous financing. It's not clear how much he's taken in this round, if any — but it stretches credulity to think he hasn't cashed out to some extent. Here's why: Normally, a company raising $28.7 million in a third round of financing, as Digg just did, would be giving up a substantial chunk to outside investors. But when the founder controls as much as Rose does, the math doesn't work. Former Digg engineer Owen Byrne, who complains that he hasn't had access to Digg's financials in some time, speculates that the round involved massive dilution — the reduction in value suffered by existing shareholders when new shares are issued. But Byrne has this exactly wrong: Allowing the VCs to put in enough money to make the investment worth their time, at a high valuation, would require substantial dilution, which would disadvantage employees and early investors. Much simpler to transfer shares directly from one large shareholder — Rose — to another. What's the effect? Already, employees at Facebook have been agitating to sell their shares, and the company is creating an internal market to let them do so. Rose, as another high-profile example, will put further pressure on startups' management to let their workers cash out. This seems dangerous: Digg, with its high traffic and Microsoft ad deal, has achieved some success — but it's hard to envision it lasting long as an independent concern. What will the boards of even less developed startups tell their founders, when they want to sell, too — that they're just not as cool as Kevin Rose?

Burn, baby, burn! That's the coded message in Digg CEO Jay Adelson's blog post about a "major expansion effort." The website, whose users rate and discuss news headlines, is hiring for 19 open positions, with more to come, as Digg expands internationally. Only at the end does Adelson mention how he's making this happen: $28.7 million in venture-capital financing. Coming after failed acquisition talks with Google, the financing round makes it clear that Digg is now planning to get bigger rather than sell out. It's a strange thing to celebrate.The obvious goal of the blog post is to advertise Digg's available jobs to prospective engineers. But in so doing, Adelson's alerting everyone to Digg's ever-expanding payroll expense — without talking up where the money is coming from. Digg has a sweetheart advertising deal with Microsoft, which sells ads for the site — but it hasn't found a revenue model of its own. And Digg has a management problem which will only get more obvious as the company swells. Adelson, who commutes to Digg's San Francisco headquarters from his home in upstate New York, has admitted that he's not as committed to the company as he could be, having been burnt at a previous startup, Equinix. Founder Kevin Rose, who still commands considerable respect among Digg's contentious users, has made it plain he's not interested in running a big company and taking it public. It's hard to picture Rose and Adelson staying if Digg is sincere about getting big.

Some little assholes used Digg and Wikipedia to spread the lie that teen actress Miley Cyrus had died in a car accident last night caused by "an unidentified black man"—and Yahoo News picked up the story. The hoax was short-lived, thank God. By this morning, it was hard to tell who, if anyone—aside from Yahoo—actually fell for it. One of the only mentions of it as anything but a scam seems to be this retarded Digg entry. So did anyone else actually buy it?

Austin-based interactive ad agency Tocquigny embarrassed itself with a video meant to show prospective interns how fun it is to work at the company over the summer. Instead of showing how quirky and Internet-savvy Tocquigny was, it proved to be a turnoff — and a ripoff. Besides not copying someone else's work, what could Tocquigny have done differently? Using five examples the agency should have followed, we'll explain how to do a self-promotional corporate video right:Rule No. 1: Convince the video's participants that the end product will be less embarrassing if they don't worry about being embarrassed while they make it. Get your people to either commit themselves fully to the project, or stay out of the way. Vimeo's companywide lip synch of Harvey Danger's "Flagpole Sitta" wouldn't work nearly so well if the girl listening to her iPod at the beginning didn't keep such a straight face. Know what else doesn't hurt? Actually memorizing the lyrics.

If there's a successful business model in the whole "user-generated content" revolution, it's in compnies getting for free services they used to pay for. Google is planning to let users rerank search results for it. Digg's users already do something like this for news headlines — likely why Google was interested in buying the well-trafficked geek-popularity contest. So why pass on it? By applying similar techniques to search results instead of news, Google doesn't have to worry about charges of copying Digg. Rather than beg Digg to sell, better to borrow functionality — and steal free labor from users.Kudos to Google for recognizing that machine intelligence hasn't quite become our overlord yet, and that there's value in aggregating human effort — and for doing it more elegantly than Amazon.com's overcomplicated Mechanical Turk. Still, at least the Turk offered users a nominal fee. Google only offers the possibility of better search results to appeal to your self-interest. The plan also offers opportunities for all sorts of bad behaviors, from harassment to mob rule. Just like Wikipedia! If you thought that Googlebombs mocking our current President, George Bush, were bad, wait until the public is allowed to vote bros up and hos down. Best-case scenario? We at least get a switch to toggle between the algorithm's tyranny, the wisdom of the crowd, and the self-affirming homogeneity of our social circle. (Photo by AP/Ric Francis)

Have you heard about Google's "Big Tent," the $100 luxury newsroom Google has set up for bloggers at the Democratic National Convention? If not, here's another story on the Internet where reporters go, Oh man, Google is totes on the pulse, giving all the intrepid young blogger kids at the Democratic National Convention this week a safe place to get massaged for free by ladies and plug in their 'iPones" — read the label — while they change the world together!

CBS hired anchor Katie Couric to turn return its news division to ratings glory. Didn't happen. So like any good media organization in the 21st century, CBS has resorted to good old-fashioned Diggbaiting. Below a video of Couric in her office, sporting a Digg T-shirt and reading a script — "Oh, hi everybody! Nice to see you. Welcome to CBS News. Sorry about my mess." Putting a woman in well-cut Digg clothing is a trick as old as the site of course. Two years ago alt-porn star Posh Suicide did the same thing, drawing 2,828 Diggs. Couric has a ways to go to catch up: Her video is sitting at a meager 40 votes after 18 hours. But then, we'd already discovered that Digg users aren't quite the slobbering teenage boys spammers assume they are.

Click to viewTake a look at the front page of crazy-huge crowdsourced web aggregator Digg today and you'll see a totally different portrait of the war in Georgia than you'd find on the front of the New York Times. It's not the scary specter of Russia asserting its dominance over the region and thumbing its nose at the West, gambling that we won't respond with force. It's not tanks rolling toward a soverign nation's capital in the hopes of overthrowing its pro-American leader. No, it is, as usual, a conspiracy by George W. Bush and the Mainstream Media to confuse and deceive you. A false story propagated by those terrible, biased gatekeepers. Also-Russian tanks are fucking awesome!!!! Why the hell would typically nerd-news and cute photo-obsessed little Digg take such a counterintuitive view of a war being waged on the other side of the globe? Three simple reasons.

On Sunday, Digg founder Kevin Rose went online, turned on his webcam, and proceeded to shave his head. A Britney Spears-style breakdown for San Francisco's linkbait lothario? No, it was just some charity bet. But we still wonder if former flame Julia Allison's recent run through town had anything to do with Rose's mental state. The saddest thing of it all: 806 people tuned into Rose's lifecasting session to watch.

A tipster tells us Google has backed out of talks to buy Digg, the popular news-discussion site fronted by Kevin Rose, the Web-video personality and San Francisco Casanova. There have been hints all week that Google has been cooling on Digg. Marissa Mayer, Google's reigning princess of pageviews, had once fancied Digg as a means of improving Google News, one of her Web properties. Last month, at her behest, acquisition talks were getting serious. But then Mayer brashly (and perhaps foolishly) announced Wednesday that Google News generated $100 million a year in revenues for Google. Translation: Who needs Digg?Shortly thereafter, reearsh firm Hitwise ran numbers which showed that Digg would be inconsequential for Google's traffic, only the 13th largest Web property, well behind Google News. Coincidence? Perhaps, but they can't have been helpful for Digg's negotiations. One other sign that the deal has been going nowhere: Digg has been interviewing for a head of PR. That's a position they wouldn't fill if they were close to a sale. That said, we hear Digg board member Brett Bullington, who helped sell JotSpot to Google in 2006, has been pushing to keep negotiations alive. So are things on? Are they off? Never say never in deals. But even Digg CEO Jay Adelson acknowledged this week, at a meetup with Digg users in Chicago, that his company has been too prone to leaks during negotiations. Could he be getting a taste of the same from the Google side? That's a theory I dig.

Why did I let Jackson West take a vacation? While our associate editor was away, we actually wrote something nice about Gavin Newsom — and he only had to save San Francisco from a rogue IT guy to do it! Microsoft's Windows chief, Kevin Johnson, ended up in Sunnyvale, Calif. — but not, as he'd hoped, in the corner office at Yahoo HQ. Facebook CEO Mark Zuckerberg flubbed more media interviews this week, prompting us to suggest he get help. Maybe he could take tips from the Internet-famous Julia Allison, who crashed his developers' conference?Allison's sort-of ex, Digg cofounder Kevin Rose, said he was buying Google. Surely not for Knol, Google's weak attempt at taking on Wikipedia — at launch, its search engine didn't even work. Jackson, come back and help us make sense of this crazy business! (Photo by Jason Calacanis)

At a Chicago meetup yesterday, Digg CEO Jay Adelson would not comment on recent rumors that Google has renewed talks to buy the site. “There is no word,” Adelson said. “We commented on one of these rumors before and it got us in trouble. There is nothing to say.” Digg founder Kevin Rose wasn't so shy, joking with the audience: “We’re buying Google.” Adelson did, however, tell the audience that following smaller social-news rivals Reddit and Mixx, Digg will soon allow users to create their own sites using Digg's technology. Adelson said the new feature would be out in six months. The Windy Citizen reports:

Click to viewOf the 377 stories Digg founder Kevin Rose has submitted to his social news site, 367 went to the site's front page. When I read this, all I could think was: God, those 10 that didn't make it must have really sucked. Maybe he should have pretended to be a hot girl? We thought we'd help the spammers "social media marketers" out by listing Kevin Rose's failed submissions below. If these stories couldn't hit the front page, with Rose's hordes of mancrushing fanboys clicking on them,then they're the exact kind of story our Digg-optimizing friends shouldn't even bother with. We'll tell you why.You don't ask questions on Digg. You give emotional answers. Next time, Kevin, submit this one as: How Obama already beat Clinton!

Google cofounder Larry Page and Digg CEO Jay Adelson were all smiles at Allen & Co.'s Sun Valley retreat. Was it because they had just wrapped up a long-rumored deal for Google to buy Digg, with the price in the neighborhood of $200 million? TechCrunch says talks are on again. (Photo by Reuters)

Click to viewConventional wisdom has it that males on the Internet gravitate toward pictures of pretty women like hungry honeybees to a sugary tulip, and click, click, click. It's why Tila Tequila has 3,345,634 MySpace friends and Tania Derveaux has 108,907 YouTube subscribers. It's why, on social news site Digg, so many spammers pretend to be attractive women — to attract votes for their stories from Digg users incapable of holding onto their mouse finger when faced with a picture of a pretty woman. But does this method work? We decided to find out.

A recent photo of sunglass-sporting Digg CEO Jay Adelson with slightly more nerdy Google cofounder Larry Page sent reader theodp on an '80s nostalgia trip. (Photo by Reuters, photoillustration by theodp)

This year's Sun Valley retreat, put on as usual by investment bank Allen & Co, will be Digg CEO Jay Adelson's second. But it marks Adelson's third or fourth trip around the block trying to sell Digg — with Allen & Co's help, naturally. Most of Digg's prior suitors — IAC, News Corp. and Al Gore's Current TV among them — are regulars at the Idaho resort. Glancing at Dealbook's photo of Adelson and Google cofounder Larry Page, we wonder: After months of lobbying from Google VP Marissa Mayer, has Google's top management finally decided to buy Digg and relieve the New York-based Adelson of his wearisome bicoastal commute? Adelson and Page's all-smiles body language in this photo strongly suggest it's so. (Photo by Reuters)