Nick Denton and Gawker Media are wrestling with the problem of content quality on the web — specifically, how to give bloggers incentives to create content that drives traffic based on quality rather than quantity. Gawker has announced that incentive pay for its bloggers will now be based entirely on the number of page views that each blogger’s posts generate, rather than on the total number of posts a blogger writes. (Vallewag has posted the entire internal memo, which anyone interested in the economics of publishing on the web should read and re-read.)

The downsides of this approach are obvious — the incentive rewards content that is salacious, titillating, slanderous, nasty, etc. — anything that appeals to the base interests of a mass audience. It rewards gaming of social news sites, i.e. creating content that appeals to the most parochial interests of users on Digg, Reddit, StumbleUpon, etc. And of course it rewards search engine optimization, writing content that is packed with keywords and that foots to the top searches, with headlines written for search engines rather than people.

Google AdSense is in many ways the most successful pay-for-performance content system on the web, rewarding content that ranks high in search and draws in readers who then click on ads. It’s easy to argue that this system has flooded the web with junk “Made for AdSense” content that has no purpose other than to generate ad revenue.

But the flip side is that Google AdSense has also financed innovation on the web, giving web start-ups and niche content creators an easy stream of revenue to help bootstrap new sites. AdSense may not be a long-term business model, but it does reward innovative new sites that can attract attention.

So what about Gawker? Nick seems to believe that pay-for-performance will lead to an overall improvement in the quality of Gawker content. He uses the adjective “linkworthy” to describe content that is of sufficiently high quality that other sites will link to it. Of course, the same salacious, titillating, slanderous, etc. content can also be linkworthy, but I think Nick is less focused on the problem of offensive or “cheap thrills” content, and more on the problem of mediocre content.

When blog networks like Gawker paid writers based on the number of posts, they provided an incentive for writers to post even when they didn’t have any interesting information or anything interesting to say. The result of this “infinite news hole” was that blog networks generated a lot of mediocre content.

You could argue that mediocrity is the real scourge of content the web, and that more “linkworthy” content means, on balance, higher quality content. Links are of course the principal driver of search engine ranking, so writing linkworthy content is ultimately the best SEO strategy. Search can and does reward the best content as easily as it can reward poor quality content engineered to game the system.

So in the final analysis, does pay-for-performance create incentives for better or worse content? I think the answer is both. The web in many ways turns a blind eye to quality — it rewards both the good and the bad.

What the web lacks most right now is a content filter that adheres consistently to a high standard of quality. If their were such a content aggregation system, it might be possible to significantly improve the quality of content on the web with pay-for-performance systems.