By now I expect you have seen Khalid’s interview with Digg top user where the mystery user says he charges handsomely for submissions and promotion. Digg needs to take careful note, there could be some profit in it for them …

I charge anywhere between $300 – $500 depending on the quality of article.

…

For a submission and promotion I charge $700 irrespective of whether the article is good or not. As you know a front page can never be guaranteed.

…

If the article does make it to the front page there is an additional charge of $500

Like Mike Arrington, my immediate thought is that Digg is leaving money on the table.

Digg should strongly consider placing clearly labeled advertisements within the news stories. Even as paid ads they’ll get a ton of traffic and Digg can charge accordingly. TechMeme, a tiny site in comparison, has done this successfully for some time. If Digg can’t stop its users from making a little money on the side, they may as well get in on the game.

How to do it?

As Mike says, put the paid article right into the flow, but clearly marked. I would go with something as simple as a “sponsored” icon.

This is bound to be profitable and popular, but nobody wants the homepage to be flooded with paid content. My solution? Do a Google.

Rather than “paying for a homepage story” you would treat the sponsored slots as an auction, the more you pay the more visibility you get, and the rest is organized by up and down votes.

The idea might seem strange but as I said, Google Adwords ranking is based on how much you are willing to pay, and Squidoo Squidoffers were along these lines (although I did point out before the implementation was quite frustrating).

What do you think? Would it work? Would you stop reading Digg if they did this?