Digg, the pioneering social news site whose traffic has been faltering, is poised to make a comeback, now that the company is again focused on improving and extending its service, Digg founder Kevin Rose said Wednesday.

When the economy started going south in 2008, Digg shifted its attention to generating revenue, moving engineers away from product development, he said at the TechCrunch Disrupt conference in San Francisco, which is being webcast.

As innovation stagnated for about 18 months, users lost interest and competitors benefitted, said Rose, who answered questions from TechCrunch founder and co-editor Michael Arrington and from audience members.

"Twitter and Facebook have definitely taken a chunk of our traffic. If we're going to stand apart we need to try something new," Rose said.

If all goes as planned, Digg will soon have a much stronger emphasis on content recommendation than it does now, allowing it to re-engage its users and attract many new ones, he said.

"In my perfect world, six months from now you'll be able to come to Digg and define your interests: Audi cars, tea, whatever it is you're passionate about," Rose said.

Based on that, Digg will proactively suggest material to users, based on what others interested in those topics are finding useful and interesting.

"If we can tackle that long tail of content, that's a Digg that's four, five, 10 times the size we are today from a traffic standpoint," Rose said, adding that the site currently attracts about 20 million unique visitors per month.