Digg doesn't pay its audience to submit stories, even though competitor Netscape does. But, according to the Deep Jive blog, that is not stopping private companies from soliciting top Diggers with offers of cash to promote their products and services. And some of those Diggers are reportedly taking the cash. Of course, when people find out which companies are doing this, they will face a PR backlash. This potential for bribery also points up the need for a reliable reputation system so that the audience members can police themselves.
The bigger question for Digg and all user-generated content sites that reach a critical mass of popularity is whether or not money will corrupt the system. Money will find its way into these communities one way or the other. There seems to be a split among companies riding the culture of participation. Those in the driver's seat like YouTube and DIgg see no need to pay their audience/contributors. While those trying to get noticed more—like Metacafe, Netscape, and Revver—are offering up cash to lure away the most talented audience/contributors.
If cash is going to be changing hands, isn't it much preferable to see it coming from the sites themselves in a completely upfront and transparent fashion than through these back-channel dealings?
Update: Some more confirmation this is happening from former Digg competitor Jason Calacanis.