Answer Guy Central

Oh, to be Kevin Rose. The founder of Digg and several other “important” Internet companies has a problem on his hands.

Kevin is a smart guy, and—now into his thirties—no longer running on pure hubris. So I’m encouraged by his acknowledgment that Digg, one of the hottest companies on the Internet about 18 months ago, is about to undergo a major business change.

Here’s the question: When yesterday’s hot new property is today’s also-ran, is business change happening too fast?

Say the words ” social networking ” and even people who aren’t familiar with the phrase have a pretty good chance of mentioning Facebook and Twitter in response. But how many would name Digg? The news aggregation and recommendation service is very much a social networking site, and with our ever-expanding hunger for news so much in evidence it seem Digg is a better place for most of us to spend our time than on Facebook reading Uncle Joe’s latest musings on nothing or on Twitter reading Guy Kawasaki’s words on how brilliant Guy Kawasaki is. But it isn’t working out that way.

So kudos to Kevin Rose for seeing the business change writing on the wall. I wish him luck (although I’m guessing he’s already lost this war).

Now jump in a slightly different direction: five journalists are about to do the reality-TV thing in France, where their task will be to report on the news based only on information they gather on Facebook and Twitter.

I don’t want my news based only on what’s available on social networking sites. No matter how good these five journalists are at mining the social networking big two, not being allowed to also look elsewhere renders suspect the news they report.

Wasn’t it just yesterday I told you about The New York Times’ plans to start charging for their web site? Business Change is a tough sport. Find the balance between reactive and proactive, and keep watching for the next wave . . .

Umm, No.

So last week, AOL’s latest CEO Tim Armstrong started talking about some plans afoot at the once-and-never-again online activity leader. And I’m glad to see that Tim has a plan.

And it isn’t going to work.

The good news: Mr. Armstrong has quite the media pedigree. Seriously, this guys the real deal, experience-wise. The bad news: this is the same plan AOL used in the 1990s. It created mediocre content then, and will do something even worse now. It is not business change.

AOL used to produce their own content and hoped people would buy/follow it. “Buy” is a reference to the position AOL once held as huge (paid) ISP to the non-tech-savvy masses, and “follow it” is about AOL’s total control over what appeared on their closed service.

The other thing AOL did was license content, and pay pretty solid commissions. I wrote IYM Software Review between 1989 and 1995, and in the final four years of that period watched both my readership and income soar under a deal with AOL. And then they proposed cutting what they paid me by 99%. And so I discovered the Internet

Back in the day content producers were on staff (or in the case of IYM contracted) and well-enough paid to be controlled . What is AOL going to offer content producers today?

So that’s the bad news. While business change can sometimes be repackaging of old ideas, this is an idea with nothing behind it. Journalists and media producers are paid less and less as the number of choices increases, and AOL is not going to magically create enough mass to get folks to write for them exclusively without paying them; and they can’t afford that.

Silk Purse/Sow’s Ear, understand?

I’m all about business change. This isn’t it.