Web 2.0: Digg.com: we vote on what is newsworthy?

11,000 friends on MySpace?????
Digg.com's Kevin Rose is a man for the masses ..the web masses. Compared to "business that arises from your everyday life" such as YouTube, Xfire, Facebook,...can it be the new entrepreneur is searching for ways technology can fill the gaps in their own lives?
....From BusinessWeek....

the cost of jump-starting a good idea has plummeted. At the same time, the sources of money have multiplied, swirling in from new VC shops, angel investors, and strategic partners galore. The awash-in-capital environment has flipped the power dynamic. Sure, they'll take money from the "sweater vests," as Digg CEO Jay Adelson calls the VCs, but they'll do it on their own terms. "It's a good time now for the entrepreneur," says John Freeman, a professor at University of California at Berkeley's Haas School of Business. "There are lots of different pots of money. It gives them the ability to modify when they take it, [and] how much they take, and leaves them with more control."

Who are some of the new geek elite? Besides Rose, there's his pal and Wall Street transplant Joshua Schachter, who recently sold Del.icio.us, a Web site to exchange favorite links, to Yahoo for an estimated $31 million; gaming whiz kid Dennis Fong, a.k.a. Thresh, co-founder of gaming company Xfire, which sold to Viacom Inc (VIA ). in April for $102 million; Mark Zuckerberg, who started the social networking site Facebook in college; and Jeremy Stoppelman and Russel Simmons, co-founders of Yelp.com, a consumer review site. The elder statesmen of the group are Hot or Not founder James Hong and his best friend, Max Levchin, who sold his company PayPal to eBay Inc. (EBAY ) for $1.5 billion at 26 and is now engrossed in Slide.com, a startup that delivers images to computers in a slick slide show format.

Digg is emblematic of the ethos of Web 2.0, new consumer and media sites revolving around social networking and do-it-yourself services. Others include YouTube, which serves up some 100 million requested videos a day, rivaling the audience of NBC. Then there's Facebook, where the college crowd practically lives. The average gamer on Xfire spends an astounding 91 hours a month on the site -- it's like a part-time job. As a result, superhigh valuations are again coming out of the Valley. In a world in which Facebook turns down $600 million deals, the $580 million that Rupert Murdoch's News Corp. (NWS ) shelled out for MySpace.com in July, 2005, is widely considered to be a steal.

Those in the know believe that Digg could become a new kind of clearinghouse for news and that its interactive community concept could snowball.

So the VCs aren't so mighty this time. There's intense competition among funders for pieces of Web 2.0. Two decades ago, nearly 300 VC firms invested in high tech. Last year, that number soared to 866 in the U.S. Meanwhile, deal sizes for Internet companies are contracting, even as valuations for those deals almost doubled from 2004 to 2005 and are rising still. That means investors are forced to take smaller stakes in Web deals, while entrepreneurs holding on to more. Money is also coming from legends like Marc Andreessen of Netscape fame, who's backing Web 2.0 projects, as are rich friends Levchin and Hong. "Until capital becomes important again, venture capitalists are screwed," says Andrew Anker, a former VC at August Capital in Menlo Park, Calif., who decamped in 2003 for blogging startup Six Apart.