In part 1, we learned that users want very little changed – they want a simple, fast, feature-light RSS reader. This time around, Digg found that a majority of users aren’t really into social features inside readers. They also uncovered that 40% would pay for a good reader. And that led Digg to all but announce that Digg Reader will be a paid service.

Although they don’t come right out and say it, Digg says that they were “pleased” to see that 40% of their survey respondents said that they would pay for a Google Reader replacement.

Also, Digg says that they would like their users “to be customers, not our product.” Sounds like Digg is pretty much set on charging for their RSS reader:

Free products on the Internet don’t have a great track record. They tend to disappear, leaving users in a lurch. We need to build a product that people can rely on and trust will always be there for them. We’re not sure how pricing might work, but we do know that we’d like our users to be our customers, not our product. So when we asked survey participants whether or not they would be willing to pay, we were pleased to see that over 40% said yes.

Although Google Reader was a free product, and yes, it is being shuttered, I’m not sure it’s accurate to say that free products on the internet don’t have a great track record. Plenty of free products have thrived and continue to thrive, with the help of advertising.

Either way, Digg probably needs to go ahead and get their reader on the market – sooner rather than later. It’s already been over a month and a half since Google announced the end of Google Reader. Users have already had plenty of time to find alternatives like Feedly, NewsBlur, Netvibes, FlipBoard, and many, many more. Digg has targeted June for the beta release – but will that be too late? And how amazing would it have to be to get people to pay for it?

Instapaper has served as a nice complement to news readers like Google Reader (or whatever you’re using these days). It’s great for when you find things you want to read later that you didn’t actually get to through your reader, and don’t have easy access to the star feature. With Digg building a Google Reader replacement of its own, it will be interesting to see if Instapaper plays a role.

Of course some current alternatives to Google Reader basically render Instapaper unnecessary. Feedly, for example, offers its version of the Google Reader starring for any page you visit on the web, and adds it to your reader. Still, the addition of Instapaper could be a key element of Digg’s creation. Either way, people already known and like Instapaper, and it will continue to have its own user base.

John Borthwick told TechCrunch in an email that Instapaper will be a “perfect fit with Digg and its forthcoming reader.

Instapaper creator Marco Arment discusses the situation in a blog post:

When I launched Instapaper in 2008, it was a very basic web app. It quickly expanded to define the pillars of the read-later market: a one-click “read later” bookmarklet, a web sync service, an adjustable text view optimized for reading, and an iPhone app with offline saving. I did almost everything myself, which worked well for the first few years, but for the past year, I’ve had a lot of trouble keeping up with it.

Instapaper is much bigger today than I could have predicted in 2008, and it has simply grown far beyond what one person can do. To really shine, it needs a full-time staff of at least a few people. But I wouldn’t be very good at hiring and leading a staff, and after more than five years, I’d like an opportunity to try other apps and creative projects. Instapaper needs a new home where it can be staffed and grown, but I didn’t want to give it to a big company that would probably just shut it down in six months.

Being familiar with Betaworks (apparently eating lunch at their office a lot), Arment figured they’d be the right company to acquire a majority stake in Instapaper. Betaworks evidently agreed.

According to Arment, the deal is structured so that Instapaper will remain a top priority, and he will continue to advise the project indefinitely.

And you probably know that Digg is working to build a replacement. They announced this literally hours after Google made their announcement that they were killing the product. Digg has said from the start that they want to build something that’s fast and simple, and could serve as a true replacement for Google Reader.

Today, Digg has published the results of a survey they sent out to over 17,000 people (8,000+ responses so far), which sought to uncover exactly what people want in the upcoming Digg Reader.

And here’s the most important finding:

What you’re looking at it a word cloud, charting the responses to the question “if there’s one thing you could remove from Google Reader, what would it be?”

Nothing. Google Reader users don’t want anything more. They just want Google Reader. Or, since the second-most tracked word was “google,” they simply want a Reader that functions exactly like Google Reader – with or without Google’s hand.

The survey feedback also uncovered some stats about RSS reader users, like most subscribe to a good number of feeds (roughly 70% subscribe to more than 51) and 80% check their feeds multiple times a day. Nearly 80% said that they use Google Reader for both work and play, and over 40% said that Google Reader is the only RSS reader that they use (the nest most popular feed reader was Feedly).

Some of the feedback gave Digg an idea of what was most important to include in their upcoming reader. For instance, 67% said that they use keyboard shortcuts in Google Reader at least some of the time. That prompted Digg to proclaim that those are “definitely on the list.”

On the flip side, there was search:

“This was an interesting data point. While 25% reported never using search, over just over half said that they sometimes do. Search is a huge investment in terms of development time and infrastructure costs. We don’t yet know if we’ll have the necessary infrastructure up and running in time for our initial beta launch, but it’s definitely on the roadmap,” says Digg.

There’s definitely going to be a hole in the market for a Google Reader-like reader come July 1st when it all goes dark – even with other options already available. Whether or not Digg can step up into that role remains to be seen. Let’s think positively.

And there was a lot of feedback. According to Digg, their blog post announcing the Google Reader replacement received over 800 comments – more than when Digg announced the big Digg redesign back in July.

Here’s what Digg says were the four overarching trends they found in the user feedback, meaning these are the things that former Google Reader users want to see in a Digg Reader:

1. Keep it simple, stupid
2. Make it fast (like, really fast)
3. Synchronize across devices
4. Make it easy to import from existing Google Reader accounts

As we know, simplicity is one of the things about Google Reader that users seem to be the most fond of.

“Google did a lot of things right with its Reader, but based on what we’re hearing from users, there is room for meaningful improvement. We want to build a product that’s clean and flexible, that bends easily and intuitively to the needs of different users,” says Digg.

And they are also planning on building a reader that better incorporates content from Twitter, Facebook, Tumblr, reddit, LinkedIn and other, more social places.

Digg says that they have been planning on building their own Reader for some time, but were forced to expedite their plans after Google dropped the hammer on Reader.

“We’re confident we can ship a product that meets the principles above, but if a feature is missing on Day 1 that you were really looking forward to, we ask that you 1) tell us and 2) be patient.”

Was it because Digg had just announced plans to build a Google Reader clone to satisfy angry users when Google kills the product on July 1st? Was Google just being a dick?

No, conspiracy theories were put to rest when Google released a statement, saying that it was all just a big screwup.

We’re sorry about the inconvenience this morning to people trying to search for Digg. In the process of removing a spammy link on Digg.com, we inadvertently applied the webspam action to the whole site. We’re correcting this, and the fix should be deployed shortly.

And fixed it they have. Digg is back up in Google:

It’s not like being de-indexed in Google was really a killer for Digg, considering the majority of their traffic is direct. But for Digg, you’d at least want digg.com to show up in a search. Thankfully, Google has fixed the screwup and everyone can carry on.

While we’ve yet to hear comment on the matter from either Google or Digg, it looks like Digg has been penalized for something or other. Either that or Google made a huge mistake.

Matt Sawyer first noticed the lack of Digg results, which State of Search picked up. You can see for yourself by searching: site:digg.com on Google and getting no results.

If you just search for “digg,” digg.com is nowhere to be found. Instead, you’ll be treated to the Digg WIkipedia entry, the Digg Twitter account, and various other pieces of content about Digg.

Some are already wondering if Digg was busted for paid links or other some other kind of link scheme kind of thing. I’m sure we’ll find out soon enough, and we’ll update as we learn more about what’s really going on.

Digg, as you may know, recently said that it’s working on an alternative to Google Reader.

Update: TechCrunch managed to get a statement from Google, saying, “We’re sorry about the inconvenience this morning to people trying to search for Digg. In the process of removing a spammy link on Digg.com, we inadvertently applied the webspam action to the whole site. We’re correcting this, and the fix should be deployed shortly.”

So yeah, Google made a huge mistake.

It’s Digg. The answer is Digg.

On their blog, Digg has just announced plans to build a reader to replace Google Reader both in function, and in our hearts.

The news aggregation site says that RSS isn’t dead yet , and it’s worth saving. Apparently, Digg has had plans to build its own reader for some time, planning to start the project in the second half of 2013. But Google’s announcement that they were canning their own Reader has forced Digg to “move the project to the top of their priority list.” Work on the new reader begins today.

According to Digg, the reader will be comparable to, if not mimic Google Reader – even down to the API.

“We hope to identify and rebuild the best of Google Reader’s features (including its API), but also advance them to fit the Internet of 2013, where networks and communities like Facebook, Twitter, Tumblr, Reddit and Hacker News offer powerful but often overwhelming signals as to what’s interesting. Don’t get us wrong: we don’t expect this to be a trivial undertaking. But we’re confident we can cook up a worthy successor,” says Digg.

Digg? Why not Digg? Someone has to step up. There are plenty of Google Reader alternatives out there right now, such as Newsblur, Feedly, FeedReader, and Bloglines. Plus, there are those magazine-style readers that kind of work like an RSS reader – we’re talking things like Flipboard or Pulse. But Digg, even having seen some troubled times over the past few years, has that name recognition. We’ll be anxious to see what they come up with.

The company put out a new blog post today to let everyone know how well the site is doing since the acquisition, and to discuss its approach to monetization.

“We’re proud of what the new Digg team has accomplished since we took over the site in August,” the team says. “We released an iPhone app, an iPad app (both featured by Apple), an email product called The Daily Digg, and a site redesign. We doubled our users, publishers are starting to notice ‘the Digg effect’ once again, and most importantly, users think we’re on the right track. As we look forward to 2013, we wanted to take a moment and talk a little bit about our approach to monetization.”

Digg did not provide the actual user numbers, but according to TechCrunch, who spoke with GM Jake Levine, Digg has over 10 million email addresses on file.

“Today, our product is about 1% done, but waiting to experiment with monetization models until the product has reached some notion of maturity would be a mistake,” the company says. “In reality, our product will never be “finished,” and designing the business separate from the product would result in a disconnected experience that does a disservice to both.”

Digg is trying out a new “Apps We Like” section (pictured), for which developers can apply to have their apps promoted. Digg says it will only pick apps that it thinks have value to its users. So, that’s a start to the whole monetization thing.

At around 10 pm EST Tuesday night, Kevin Rose (thekevin on reddit) posted “I am Kevin Rose, Founder or Digg, AMA!.” Hundreds of comments began pouring in, as redditors asked about Digg (past, present, and future) as well as a range of other topics.

The only problem is that it’s Wednesday morning and Rose hasn’t answered a single question.

The abandoning of the AMA made for some digs (sorry) against Rose from angry redditors. Here’s a nice exchange which references the fact that Rose tweeted an Instagrammed photo of Alcatraz during the time he was supposed to be answering questions in the AMA:

Rose just tweeted his excuse. Apparently a birthday party kept him from answering redditor’s questions yesterday evening.

Follow @kevinrose

Kevin Rose
@kevinrose

Answering IAmA questions today, had a friends bday (@hutchins) to attend last night, sorry for the delay

 Reply  ·  Retweet  ·  Favorite
4 minutes ago via Twitter for iPhone · powered by @socialditto

Hopefully, Rose will get back to the AMA. Even so, it’s not really standard for an AMA subject to wait 13 hours to begin to answer questions.

That’s just bad reddiquette, man.

And with that, Digg v1 is born. Today, the company is giving us a hint of what the all-new site will look like. And on first glance – it really is all about the images.

Just a couple of weeks ago, Digg made headlines when the news broke that it had been sold to Betaworks (of Chartbeat fame) for a paltry, embarrassing $500,000. We later learned that that figure wasn’t entirely accurate, as other players snatched up other parts of Digg for around $16 million. Still, the final selling price was ridiculously low for a company that was once one of the VIPs of the online news realm.

A week after news of the purchase broke, Digg announced that the all-new Digg, v1, would be launching on August 1st. I guess that they decided that a redesign was much overdue, considering their own poll found that 92% wouldn’t recommend Digg in its current form to a friend.

In a blog post, Digg explains v1 as being built upon four main principles:

We make it easy to find, read, and share the most interesting and talked about stories on the Internet right now; The experience must be fast and thin. Let users go, and they will come back to you. We optimize for return visits, not pageviews per visit; Build an experience that is native to each device: smart phone, inbox, Web page. Stories must find the user, wherever they are; Users must be able to share where they and their friends already are — on networks like Facebook, Twitter and email.

And with that, here’s what the front page of Digg will look like (minus some additional tweaks at the end):

The new version of Digg is going to take into account Facebook likes and retweets in the Digg score, and the new score icon will include the breakdown when you hover over it:

When the new Digg launches, there won’t be a commenting system. According to the blog post, that;s because they just couldn’t get it right in time. Commenting will return in the “coming weeks.”

Also launching at the same time as Digg v1? A brand new Digg app for iOS and a mobile version of Digg.com.