
Digg Raises $28 Million in Series C Funding - jkopelman
http://gigaom.com/2008/09/24/digg-raises-28-million-in-series-c-funding/
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staunch
I wonder how accurate that page view count is. Seems extremely low given the
number of visitors they have. Just 150 million page views cannot generate that
much ad revenue. Maybe $100k-$200k/mo max even with a sweet heart deal from
MS?

Seems kind of sad that they're digging (sigh) such a big hole. If they had
kept things light originally they could have sold for $80 million and walked
away with more themselves with much less risk of total failure.

Hiring a bunch of people, fancy office, tons of servers. Totally unnecessary.
The site could be run with very few resources if they had made that a goal.

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markm
Digg is also valuable for the page views it creates on other sites as well.

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stanley
True, but selling that as a service would negatively affect their image.

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iamelgringo
Digg has a positive image?

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mdasen
Digg has been around for a while and it seems a little odd that they would
still need such a cash injection if they were to be self-sustaining at any
point in the future. Are they hiring a lot of new people and moving into new
areas?

If they're using this money to cover operating costs for another finite period
of time, it points to a failure of their business model since they aren't able
to sustain their costs based on their revenue.

Digg has a wide reach, but they don't have great engagement of their users.
Going off compete.com's data: Digg users hit 4-5 pages per visit and visit the
site less than three times per month. So, their monthly uniques are high at
20-25M, but their total visits are low at 70M.

Digg is a decently impressive service, but community is hard. Google deals
with hard issues, but nothing is harder to figure out than people.

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kqr2
From the article, it looks like Digg is plateauing. Consequently, they
probably want to expand and are looking for cash infusion.

Or more cynically, management is looking for some way to monetize their
current shares without an IPO or buyout in the near future.

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Kilimanjaro
"Microsoft already has financial ties to Digg. The software maker sells online
ads for Digg under a three-year deal that expires in 2010."

So Digg is controlled by microsoft? No wonder all the xbox love and zero wii
or psp news.

Talk about fair and balanced!

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unalone
I think it's more a matter of the crowds attracted to Digg. The 360 is the
"mainstream gamer" console, whereas Wii appeals to a wider audience and PS3
has a more limited fanbase. The sorts of people on Digg fall close to the 360
base.

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fallentimes
The plans seem reasonable, but I hope they're profitable by now. I'm assuming
this was a case of cash flow from operations not being able to finance their
aggressive expansion plans.

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wensing
Entire Digg revenue model == advertising?

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ojbyrne
Digg does quite well on "sponsorship" type advertising. I.e. they add a new
feature, or a labs thing, and get Cisco or Intel or someone to sponsor it.

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stanley
But how long can they sustain that for?

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rms
Anyone know what the valuation was?

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ojbyrne
My guess (and I'm a shareholder) -- down round, more opportunities for Kevin
and Jay to extract value (personal service contracts, deals tied to the two
spinoff companies, etc). Every employee and ex-employee loses.

The two of them have done a great job, at every turn, of hiding financial
information from the minority shareholders. Meaning me most of all. The fact
that it's a guess proves my point. I'm still fighting for 2006 financials.

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ojbyrne
My comment got picked up by valleywag. Just to make it clear, I have the exact
same class of shares as Kevin, and no mention of cashing out has been
mentioned to me. If there hasn't been "cashing out" I'm fine with that. If
there has been, I at the very least should know the details. My issue isn't
dilution but liquidity preferences.

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davidu
You should make clear why you think that's true, since it isn't in just about
every situation I've ever been involved with.

You aren't on the board and you aren't a major shareholder.

Your shareholder agreement or employee agreement probably state that you agree
to vote with the majority in all votes which is another way of saying you
don't get to vote (or gain access to the financials).

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ojbyrne
The second half of your second paragraph and the entirety of your last
paragraph aren't correct. Or weren't until I left the company.

