• George Keyworth, the board member caught leaking details to CNET in 2004, also resigned Tuesday morning.
• Dunn publicly says she didn't authorize the "pretexting" (lying to access phone records) that got her in trouble. In fact, she was "appalled." Official policy is to believe her and accept her passive-voice apology.
• "Dunn" puns will be funny forever.
• A reader tells Valleywag:

  Here's the story from my pressy contacts: Dunn saved skin, as she was basically following orders, she's got massive dirt on others, company-wide thing.
  
  They are going PR shock, as it seems they spied on Dell and IBM people....afraid of the lawsuits and the market shock. Yah yah. I'm sure of it. That pretexting was a competitive policy, this wades into the bigtime criminal.

• Okay, so who's the real bad guy? Try Larry Sonsini, the powerful HP outside counsel who told former board member Tom Perkins that pretexting was legal. Forbes publisher Rich Karlgaard says HP should fire him (and Apple should too).

Embattled H.P. Chairwoman to Step Down [NY Times]

Pretexting is lying. Wikipedia says: "Pretexting is the act of pretending to be someone who you are not by telling an untruth, or creating deception. The practice of pretexting typically involves tricking a telecom carrier into disclosing personal information of a customer, with the scammer pretending to be the customer."

It's common. The Washington Post says: "A security specialist said it has been a 'tradition for decades' for chief executives of big companies to hire private investigators to spy on colleagues, calling it a 'common power play.'"

It's easy. "All you need is the last four digits of a Social Security number and a correct ZIP code," a repossession investigator told the New York Times, and "you can view the bill."

It works. Hewlett-Packard's probe outed board member George Keyworth as the leaker who shared important business information with CNET.

It's unethical. At least according to a former president of a trade group, the National Council of Investigation and Security Services, quoted in the Times.

It's illegal. The Gramm-Leach-Bliley Act outlaws unauthorized attempts to gain personal nonpublic financial information. (Lawyers disagree on whether the ban applies to phone records.) Phone providers view pretexting as illegal and sue those who attempt it. This is why many investigators say they've stopped the practice. A bill in the California State Senate could make the offense a state crime punishable by up to a year in jail.

It got Patricia Dunn and superstar lawyer Larry Sonsini in trouble. As chairwoman of HP, Dunn authorized the leak investigation that included pretexting for phone records. Dunn now says she did not know of or authorize any pretexting. Also, the San Jose Mercury News obtained e-mails in which Larry Sonsini (outside counsel to HP) told former board member Tom Perkins that this investigation was legal.

The phone companies are fighting back. Most notably, Verizon is pushing against pretexters and other dealers in personal phone records. For example, the company settled with a records vendor who agreed to stop selling phone records and to share how they obtained those records.

This isn't the last scandal we'll hear. The president of one security company says that heads of Fortune 500 Companies hire "fly-by-night organizations" to do their dirty investigative work all the time. Now that a pretexting scandal is front-page news, expect investigative journalists to hunt down similar stories.

Pretexting [Wikipedia]
When a Stranger Calls, Beware of The Pretext [Washington Post]
An Industry Is Based on a Simple Masquerade [New York Times]

Basics

• Name: Digg
• Pronounced: Just like "dig"
• Address: Digg.com
• What to call it: a social news site
• Who made the content: thousands of users
• Who made the technology: Digg employees

How it works

• How the front page works: Look at Digg.com. You're seeing a list of news headlines, each linking to an outside story. Clicking the yellow digg box for a story sends you to that story's comments page.
• How a Digg story works: Each story was submitted to Digg by a user. Other users then clicked "Digg this" to vote for the article. Take, for example, this story about Brian Williams interviewing George Bush. It began when the Digg user "Anarchrist" submitted it using a form page. This sent the story to the upcoming stories page.

• How a Digg story works, part 2: There, some of Digg's most dedicated users "dugg" (voted for) the story. When a certain number of users (usually about 40; the number is slowly rising as the site grows) dugg the story, the Digg system automatically moved it to the site's front page.
• Jackpot: Because most Digg users are casual browsers, a story with a few dozen diggs can earn thousands once it's on the front page. As of press time, over 200 users each gave the Williams/Bush story one digg.
• The descent: When a story hits the front page, it starts at the top of the page (and thus gets viewed more than any other story). The story slides down over the next few hours as new stories stack above it. Eventually it slips off the bottom of the page and onto page 2 (and so on).
• So who edits it?: Digg users can "bury" a story by marking it inaccurate, "lame," or several other pejoratives. Just like flagging on Craigslist, if enough users bury a story, it disappears from most feeds. Users can choose to see buried stories.
• Comments: Any registered user can comment on a story or reply to another user's comment. Users can also vote on these comments. More on this under "How Digg is broken."
• The Digg Effect: What happens when a Digg story links to you? You get a flood of traffic that disappears after a day or two. This article plots out the number of Digg users who visit a linked story, while this article examines their behavior.

How Digg is broken

• False rumors can hit the front page: This is the most common and most easily refuted criticism of Digg. Because Digg users can bury a story or leave illuminating comments, rumors are often quickly corrected, and in the end, readers know more than they did before. Digg users can thus turn a wrong story into the right story.
• It's made for geeks: Digg started by only covering technology news. The site now includes categories such as world news, videos, and entertainment news as well. But the user base is mostly made of users who joined for the tech news, and what worked for them may not work for readers of other types of content.
• It's a junk drawer: Another legitimate criticism. When everything's news, nothing's news, and Digg's layout presents every story as equal. The lack of a definitive "top story" may turn off mainstream users.
• User cabals own the site: While a cabal of users could send each other their submitted stories, digg them, and thus "game" Digg, most undeserving stories will be immediately buried by the thousands of non-cabal users. Cabals are a problem for Digg's creators, who have to handle the spam, but they have little effect on users. It's Linus's Law: given enough eyeballs, all bugs are shallow.

Digg's competitors

• Reddit: Because this social news site has no categories, a much smaller user base, and a lower volume of stories, it doesn't truly compete with Digg. Also, while Digg earns money on ads, Reddit is ad-free and earns money by licensing its technology to sites like Slate.
• Netscape: AOL relaunched its Netscape portal as a social news site eerily similar to Digg (which earned Netscape much criticism). Like Digg, Netscape includes several categories. Unlike Digg, Netscape pays some users and hires editors to hand-pick some content as "top stories." Netscape has higher traffic than Digg, but it has little of Digg's media buzz.
• Slashdot: Digg founder Kevin Rose first pitched his vote-based content idea to this old-school technology community. Slashdot is an older, more stately community where stories are written by users and hand-picked by editors. There are fewer stories, older users, longer excerpts, and often richer discussions.

Digg's buzz

• Earlier this year, blogger Jeremy Botter wrote that Yahoo offered over $35 million for Digg. Rose denied the rumor, saying on one podcast, "I wish."
• This August, BusinessWeek ran a breathless cover article about Digg which valued the company at $200 million and Rose's share at $60 million. Rose says this is nowhere near true, and Digg does not yet pull a profit. He also dislikes the cover photo.
• ABC World News described Digg on its daily webcast on August 30.

How Digg fits the buzzwords

• User-generated content: Again, nothing is written by paid editors. To the site, that means free content. To the users, that means freedom to make content.
• Citizen media: Digg is essentially a user-driven news site that anyone can join and influence. The technology behind the site ignores the content of stories. Users ignore or bury bad stories and promote good ones; the technology only acts as a ballot box.
• Web 2.0: Oh god, you really need to use that phrase? Okay: Like other Web 2.0 companies, Digg depends on a vibrant user base exploiting web-based technology to share content. It aggregates information from other places on the web, and returns the favor by sending traffic to those places. Digg is part of the new generation of web companies, and it's now nearing its second birthday. Finally, it uses dynamic page technology (in which a page changes without reloading) for its digg voting system.

Don't say

• "Digged."

Read Diggers' comments on this story: Cheatsheet for Digg.com: How it works and how to namedrop it [Digg]