Scott Karp points out that Digg owns its niche.

Digg is the apotheosis of niche media — of the niche, by the niche, and for the niche. Never has another media company so perfectly captured the interests and ethos of one defined group of people — in Digg’s case, under 25, male, liberal, interested in tech

There’s a lesson here, I think, that goes beyond social bookmarking: If you can tap into a niche and let the user own the experience, you’re onto something powerful. The question is, is hyperlocal potentially that kind of niche. I don’t think anyone has quite figured it out yet. That’s not to say there aren’t good hyperlocal business models to be worked on, but can it really excite the kind of passion Digg has uncovered?