A redesign is part of the Web site’s plan to regain momentum as it has lost ground in a crowded field that includes Facebook and Twitter.
Senh: In terms of analysis, the article is similar to what I wrote. Mainly, Facebook, Twitter, and Yahoo Buzz got into link sharing and pretty much pushed Digg aside. Digg execs attributed the lost in traffic to Google's new algorithm which resulted in less referral traffic to Digg. The article also has an in-depth write-up of its history.
