"Hey Luke, where did you get those new tires for the General Lee?"
"I got them down at Cooter's. Aren't they sweet."
We all pick up things by word of mouth. We might learn where we can get the best price on a product, where to find some funny podcasts, or find out who might know the answer to some question that we have. About a year ago a site, digg.com, was launched which provides such a service on-line.
Digg.com works just like it does around the water cooler. If you know something that you think is interesting, you share it with others while you are waiting in line for some water (or at the microwave, refrigerator, etc). If the people you told thought it was interesting, then they tell some people, and so on, and so on. Digg.com allows users to submit stories, and other users either digg it or ignore it. If users digg the story it's digg count will rise, making it more visible on the site, and eventually if it is dugg enough, it will end up on the home page causing a digg effect.
The digg effect occurs when a story gains enough diggs to move it up the ladder to the digg.com home page. Veing up front and center the story will gain even more notice, and will be visited by digg visitors. Some have said that you can expect a jump of 5,000 to 10,000 page views per day, and for some dugg sites this could be 10 times more than their usual traffic. Some webmasters see the dugg effect as a good thing, allowing their site to be seen by many, and hopefully some of them will become regular visitors. Others see the digg effect as harmful, causing bandwith cost overruns, and complaints that digg users don't contribute to their site, either through comments or clicking on ads (sort of a virtual "wham bam...").
There are mixed feeling about the term digg effect, some outright dismiss it. I think that for large sites, a mere 10,000 extra page views per day is fairly trivial, but for small sites this is a lot of traffic, and is a real phenomena.
I for one am a hooked digg user. One of the features that I enjoy is digg.com/spy, which uses AJAX techniques to update the page every 10 seconds or so. This page displays recently dugg stories, and acts like a virtual "what is cool" gauge. I often find it entertaining to just stare at that page, and watch stories being dugg, like a meme stock ticker.
Digg is, I think, a glimpse of what is to come with Web 2.0. It is a site powered for the people, for the people. It is well recieved I think because in this day and age where people are skeptical of the media, and of our politicians, this is one place where they feel that there vote really counts. Digg also has a very low bar for entry, where you don't need to be a long time member, or have some special knowledge to become part of the community. You can jump right in, and digg stories, comment on them, and post your own. This has no doubt has lead to their success.