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Facebook fever has finally caught up with Digg, the user-generated news site launched in 2004. Digg is a niche site compared to Facebook, but it’s still a top source of referral traffic to many sites including VentureBeat. The new, fourth-generation Digg soon to launch will focus on creating social network “chain reactions,” to use its founder’s words, rather than routing mob stampedes from a single vote by all users, as Digg did in the past.

Kevin Rose, Digg’s videogenic founder, has produced a three-minute video that he says is for “publishers and influencers” hoping to get play on the site. In March, Digg CEO Jay Adelson had promised attendees at the South by Southwest conference that a much faster version of Digg was coming soon. Rose now explains the social-network component of the new Digg.

– Friends and sharing are key components of the new site. It will prompt users to import their Facebook and Twitter friends. There’s also a suggested-people-to-follow list. On Twitter, a similar list brought hundreds of thousands of followers to relatively random accounts.

– Digg’s homepage will replace the current “News, Images, Videos” label with “My Latest News.” Rather than holding a singular voting session involving all users, Digg will now rank individual users’ content based on what their friends “digg,” or vote for.

– Rose says in the video that, “only about 120 to 140 stories per day actually make the homepage.” Only? That’s a New York Times volume of content. It’s possible that friend-recommended links will only be the cream floating on top of Digg’s homepage, with generally-popular links filling in Digg users’ expectations to see more than 100 recommendations a day.

– When you digg a story, all your followers will get it. They can then digg it to their friends in a sort of chain reaction. At least that’s the theory. In practice, most stories will probably fall flat rather than being heavily re-dugg.

– How will Digg be any different from Twitter or Facebook now? Rose says, “Because we’re only links and news, we cut out all the miscellaneous status updates you find on other sites.”

[youtube=http://www.youtube.com/watch?v=Y9rc-Ou6814&w=640&h=373]

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