Mashable has a very lengthy but equally illuminating overview of social bookmarking site Digg, following the service’s decision to ban many of its biggest users. It’s essential reading for anyone involved in reader communities and user generated content. Here are some of the highlights:

Users quickly realized that one way to get diggs for their submitted stories was to make someone your Friend and consistently digg that person’s stories. Reciprocal diggs would usually follow.

… Users who had these attributes naturally saw a large percentage of their stories get promoted to the front page. This was what led to the concept of “top users” or “power users,” a notion that was, in some ways, antithetical to the idea of democracy (and that’s completely leaving out the fact that the site needs editors to supplement the efforts of its users).

… At one point, Digg’s top 100 users were responsible for over 50% of Digg’s front page stories.

… In a stunning analysis by ReadWriteWeb, the site … began dramatically expanding the variety of its front-page topics, focusing less and less on technology as the years went on (in other words, while the proportion of tech stories to all stories submitted remained roughly the same, the proportion of tech stories promoted to the front page went down dramatically). The implications of this were more troubling: Digg was actively manipulating the distribution of front page stories.

And here’s the key lessons at the end:

True Democratization of News is Difficult – Rose and his crew are undoubtedly a talented group of programmers, but even their Digg algorithm has had compensating for the flaws inherent in Digg’s system. In the years following its creation, Digg became less a democracy and more a republic, with a select few users responsible for the majority of front page stories. The Web is still struggling to come up with a news model that can efficiently crowdsource its editorial process, although sites that automate the process (e.g. Techmeme) or sites that rely on editors (e.g. Fark, Slashdot) are at least more transparent with their advantages and failings.

Recognition is a Key Motivator – Social networks typically have a tangible way for users to track their notoriety. MySpace has “Friends,” Youtube has “Number of Times Viewed,” and Twitter has “Followers.” Digg has “Stories Made Popular.” Top users often pointed to this number with pride, a reminder of the thrill of seeing one’s submission spread to thousands of eager readers. Digg, however, has done nothing to acknowledge their contributions and with its recent bannings, it has indicated it doesn’t believe it needs them at all.

While Digg’s growth may not be adversely affected by the accounts gone missing, it seems that when Time named “You” the Person of the Year in 2006, they were actually on to something more meta than originally thought: People like being recognized for contributions and the potential for Internet fame that may follow. Social networks that have gone on to insanely high valuations or become profit-making ventures have recognized this fundamental fact of Web 2.0. Digg has not.

Communities Require Nurturing – The way that Digg has treated it users has not been with the committed touch of a benign leader, but of a dictator that assumes its actions (or lack thereof) will be consistently met with the assent of its followers. Its town halls have been little more than PR exercises, and user-requested features like the Recommendation Engine have taken years to roll out, while others (e.g. forums) have yet to be implemented at all. 

More over at Way of the Web:

The fact that the high profile, long term devotees of Digg could be powering the rise in a close rival (in terms of the type of service provided) [Mixx] could prove to be a very interesting case study – if the very people Digg banned turn out to be able to power the rise of a challenge.