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Day two at the Web 2.0 Expo, and the name of the game is, without a doubt, social media. To hell with professional editors and publishers; the new world Web order is built on the backs of the people. Or so every speaker and every wide-eyed business owner frantically scribbling notes here would have us believe. All we have to learn is how to game wisdom of the masses and we’re gold

But is it that simple?

In a presentation on Social Media Optimization, Neil Patel—the swaggering director of marketing at ACS—waxed poetic on the Social Media Effect. Basically, a fluke piece is picked up on Digg or Delicious and is backlinked so rapidly and frequently that the original site’s Google PageRank shoots up. Instead of the slow, intensive process Patel’s co-presenter (Chris Smith, a strategic consultant for Netconcepts) was espousing, using SME is a speedy and remarkably effective way to game that social media.

To my eye, however, the fundamental flaw of this exploitation of social media is that when the network expands beyond a certain point, the efficacy drops. The Diggs and Deliciouses can grow too large, and fairly quickly at that. As more people join, they become oversaturated with content. More and more users means more and more stories appealing to a greater range of interest and opinion. Votes, clicks or diggs are spread thinner (it’s far more rare these days to see stories with many thousands of diggs) and the effect on sites and products hoping to up their PageRank is lessened.

I asked Patel about this changing landscape and he insisted that understanding how the community worked was still adequate; that SMO was still a sustainable way to grow a Web site.

So in the grand spirit of Web 2.0, let me ask you: are social media’s days numbered? Do you find sites like DIgg and Delicious as useful as ever? Hit up the comments section and let me know. We’ll be at the expo all week long, so if there’s anything you’d particular like us to cover, drop it in there as well.

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