It's a good action.
Digg announced today that it has tweaked its policy on the nofollow attribute on external links.
"We've made a few changes to the way Digg links to external sites that may impact some folks in the SEO community," says Digg's John Quinn. "These changes reduce the incentive to post spammy content (or link spam) to Digg, while still flowing ’search engine juice’ freely to quality content."
Digg is now adding rel="nofollow" to any external link that they aren't sure they can "vouch for." This means:
- External links from comments
- External links from user profiles
- External links from story pages "below a certain threshold of popularity"
"This work was done in consultation with leading experts from the SEO/SEM and link spam fields, in an effort to lookout for the interests of content providers and the Digg community," says Quinn. "As always, we will closely monitor these changes in the wild and iterate based on feedback."
Speaking of Digg and search, Digg also talked a bit today about the search feature they launched earlier this year.

"We're using Apache SOLR/Lucene which helped us scale horizontally and solved many of our relevancy issues as well as enabling discovery of new content through facets," the company said earlier today. "Beyond site search, the rich set of features has allowed us build a platform that enables other features such as Related By Source and Related By Keywords."
There is a podcast available here, which discusses Digg's search feature in more detail.
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I think this is a great idea, though you are still going to see a ton of 1 digg stories though at least there is less incentive.
This policy seems MUCH more fair than just making everything nofollow like many other sites do and should ultimately reward good content and help good stuff succeed overall since theoretically google could then weight the link value based on digg popularity too. (though I suspect they are already doing that.)