Danny – great post and loved the rant on the Daily SearchCast.
After reading your post and listening to the SearchCast, I dug into Hitwise data on this to compare the clickstream data for Digg and Google News (in the UK). My findings seem to support your statements about quality. Seems that Digg traffic in the UK is much more about games and videos than news. I was really surprised that Reddit, which gets less traffic than Digg in the UK accounts for more visits to News and Media websites than Digg.
I am still hooked on Digg, but

Hi Danny
One thing I missed from your report was the “value” of the traffic you received.
Value doesn’t have to be monetary, it can just be additional subscriptions, or even just the number of additional page views certain traffic generates.
I have always found that traffic that generates more than one page view is much more interested in the subject, than the sensation, and thus you get more page views, and actually get a much better CTR on various forms of monetization.

Hi Danny,
Interesting event, but as you say, one case study does not a rule make. We have found that it depends on what the content is and how many times it gets “digged.” Google News shows our site love every day that we publish new content, but if you look at this Alexa chart: http://tinyurl.com/ylus9n you’ll see a spike in traffic in July. That coincided with one of our articles being digged thousands of times (presently over 6000). Your article was digged 870 times.
Google News is a constant referrer of traffic to our site, but I think that certain content really catches the interest of the Digg crowd. It also seems to matter WHO submits the article on Digg. There is a core group of top Diggers, and their submissions seem to carry more weight with that audience.
Regards,
David Steiner
AuctionBytes.com

What a great post Danny. These results were very interesting and informative.
Just hope those diggerz don’t come and flame you! Ehhh…. what do they REALLY know about search anyway?