This is already happening in some areas. Ebay, istockphoto, blogs. Find a way for all the individuals to make the money, and they’ll massively disrupt the system. The only ones making the big bucks are the ones building the systems that let everyone make money, and eventually that too might be distributed.

If Netscape is able to poach some top users, and Digg suffers because of it, and Netscape gets some traction – the impact will be felt around the industry.

Then there really will be a reason for all of these user generated content sites to take VC money.

The First is that Digg is a service for a very small niche group of people who are really into the internet and into tech (see the Pew results for just how small this group is.) What made Netscape think the rest of the world is that much into the ‘net as most Digg’ers are? Seriously….

Second, what demographic constitutes this “few”? Probably mostly young males–who, for some reason, seem to have more time for this sort of thing than young females (socializing/communicating patterns are different–may be just as many women as men blogging and social networking, but are they doing it about news or about their lives? Probably more of the latter than the former. Not to mention the paucity of women in tech anyway.)

So, what may end up happening is a group of young smarty-pants guys deciding what today’s headlines.

Is that going to be any better than a bunch of old curmudgeonly guys deciding today’s headlines?

The money may be an allure for a short while, but over the long haul the decision to keep the experiment going will reside with the Board more than the Users.

Guess it depends on who you ask.