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I have been on both communities for years now and I can say that when Digg's intellectualism declined there was no way for people to avoid it but to emigrate. However when it declined on Reddit the structure of sub-reddits and how you can unsubscribe from sub-reddits helped a lot. Digg might have implemented this over time but it is too late.
You can avoid much of the stupidity on Reddit by unsubscribing from a few top reddits - pics, funny, etc.

And yes, the fact that you can subscribe to specific reddits ensures that the level of discussion always remains above par.

Another point to consider is that Reddit has the backing of a huge company that is making money elsewhere. They can be choosy with ads, etc.

Digg, on the other hand, was forced to make different decisions because they needed the incoming revenue. But, they could have done things differently and still kept revenue (and users) up.

What surprises me is that Conde Nast hasn't dicked around with Reddit at all. I didn't expect they would be able to run such an independent house. Good for Conde Nast. Good for the internet. Reddit could've very well gone the way of any AOL/Yahoo acquisition.