Digg Acquisition Rumors

Trackbacks/Pings (Trackback URL)

1. Derek Gathright
   

   January 25th, 2006 at 11:19 pm

   $30 million? No freaking way. I could code a good portion of Digg in a week, so it obviously isn’t the technology or the staff, it is the user base. Why does yahoo care about adding a 10s of thousands of tech junkies to their services, expecially when I’ve read report after report that Digg users click a link, run around a site, trash it, and don’t click ads at all? There’s no existing business model for Digg or it’s userbase. Yahoo! could easily start their own Digg for tech and non-tech news, and have a userbase far greater in a few weeks time just becuase of the company backing it.

   If these aquisition rumors are true, it has to include a peice of Revision3, because one day that will be a cash cow, not Digg. Also, with that asking price, there must be something huge up Digg’s sleeve (features, business model, etc..) that hasn’t been thought of yet. Digg as it exists today can’t be worth much at all. $30 million is insane.

   Want my advice Yahoo!? Just hire Kevin Rose for a media director type position. You’ve always wanted to be a media company, he’s the guy you want. Giving him a few million over the next few years would be faaar more valuable than buying the website of the week.

   And yes, I am an avid Digg user.

2. Mike D.
   

   January 25th, 2006 at 11:46 pm

   Ah, here we go with the “I could built it myself” motif. Yes, you could built it. I don’t even know you, Derek, and I know you could build it. Just like any one of us could build Del.icio.us as well. But the difference here is that Josh and Kevin *did* build it. “Can” and “did” are two different beasts, not even sharing a single bloodline, really. “Can” is common and descriptive. “Did” is opportunistic and often times, revolutionary.

   I don’t have a shred of inside information to tell me whether this deal is legit or not, but I do know that Digg will eventually be purchased because they are *great at what they do*. Anybody in the tech world who has a large audience and is great at what they do will either a) cash out, or b) go about it on their own and see how profitable they can become. If you’re *really* good, you can probably do both.

   One other thing you have to keep in mind as you emit sounds of exasperation at a number like $30 million is that this isn’t yours or my $30 million. Yours or my $30 million is like a “life savings” type of number (if you’re lucky!). When you’re a public company like Yahoo, with a market cap of $49 billion (that’s 49 thousand million), the only question you ask yourself in a deal like this is: does acquiring Digg make us x% better than we already are. In the case of Yahoo, “x” is “.1633″. Not even 1%. One tenth of one percent. One in 1633. If you divide the company into 1633 parts, is the entire entity of “Digg” worth at least one of those? To me, the answer to that question is yes, without question.

   When you’re a public company, a deal like this is not “going out on a limb”. It’s a responsibility in some cases. And on top of that, it’s not just about securing something like this for yourself… it’s about keeping it away from competitors.

3. Jason L. Baptiste
   

   January 26th, 2006 at 12:06 am

   Mike D., you definitely hit the nail on the head. Before Yahoo! bought delicious, they had a service quite similar. Delicious didn’t have a huge userbase. I believe around 300K members at the time of purchase? Delicious had a loyal userbase, which used the service, and gave it a great name as one of the “it” Web 2.0 companies. Look at it this way, delicious and digg are just small test runs for their real capacity pre-acquisition. Once they are acquired they gain the resources, foundations of the number one site on the net, and so much more. At that point the flood gates open. Look at the growth of delicious in terms of reach since its acquisition by Yahoo. It has doubled. That is in a matter of a month. It’s all about the value added to the company. Yahoo! isn’t looking what digg’s value is on its own, but what its value is once added to the Yahoo! family. I for one, hope this happens, as the digg service will get even better.

   -Jason L. Baptiste

4. josh
   

   January 26th, 2006 at 12:11 am

   Ooooooh. A non-denial denial. Saucy.

5. aaron
   

   January 26th, 2006 at 12:16 am

   This is sort of for MikeD- btw newsvine rocks… My question would be- if Digg, one of the fastest growing sites right now, would take 30, does that mean they think their growth is over or slowing? I would venture to say that a good portion of people who *should* know about Digg probably already *do* know about it. If they are considering a sell out, perhaps they are facing a question of scalability (not from a tech side, but organization side)? Newsvine seems to have some of this figured out, and I would hope your sweet spot isnt just in the mid eight digits.

6. Mike D.
   

   January 26th, 2006 at 12:16 am

   Jason: Yep, and let’s also remember that the 300,000 number was “total number of people who ever registered with del.icio.us”. Of that 300,000, how many ever used the service again? And how many used it more than even once a week? Have you ever tried to explain Delicious to anyone, tech-savvy or not? It’s pretty tough to instantly “get”. I mean, I consider myself a “loyal Delicious user” and yet, all I use it for is saving links once or so per week and never hitting the site directly in a web browser. We’re not exactly talking about a mySpace phenomenon here where millions of people are spending hours per day on the site.

   Once again, however, I will reiterate that I have zero evidence about this deal. I’ve read about it on TechCrunch, on Om’s blog, on Kevin’s blog, and that’s it. We’ll see what happens…

7. Michael Arrington
   

   January 26th, 2006 at 12:20 am

   Mike - I agree with the others…Newsvine does indeed rock.

8. Stephen
   

   January 26th, 2006 at 12:44 am

   Digg X Factor = 0.1633 - Nice MikeD

   Newsvine is great. Drop in some of the Yahoo News partnerships and Newsvine X factor multiplies.

   Del.icio.us is becoming locally used, X factor here has multiplied.

   And with the Google/Sun sponsership of stopbadware.org, Yahoo should purchase siteadvisor.com

9. theCreator
   

   January 26th, 2006 at 1:08 am

   Match “There’s no existing business model for Digg or it’s userbase.” against “Digg is profitable”

   No match found.

10. Ed Dunn
    

    January 26th, 2006 at 4:19 am

    Mike D.,

    I have to agree with you that it is the people behind the web site, not the web site itself. After all, anyone can build an web auction site.

    I was a marketing/business person before I was a programmer and I’m qualified to say most programmers are not cut out to talk about launching a web business, despite their skills. I don’t know many programmers that can talk to a layman in plain, convincing talk about what they created.

    I’m impressed with Digg as well as YouTube and Technorati founders and CEO by their comments “we are focus on building, not selling out”. I know this is the true sentiment of the new web firms, building..not selling out.

    This may explain why I stated before, most of these Web 2.0 bloggers are opportunists instigating rumors hoping to get in and make a few bucks off an acquistion deal to Yahoo or whoever.

11. Dan W
    

    January 26th, 2006 at 4:22 am

    I’m not a big fan of newsvine. Ask me why.

12. Dan W
    

    January 26th, 2006 at 4:42 am

    ‘Ramping’ has been around for years. Remember all the fuss about people ramping up share prices on fool.co.uk during Dotcom Boom 1.0?

13. Joseph Nilo
    

    January 26th, 2006 at 4:52 am

    Good for Kevin and the guys! They developed a simple, yet powerful website that has changed the way a lot of people surf.

14. Derek Gathright
    

    January 26th, 2006 at 6:58 am

    Mike > I give them all the credit in the world on actually doing what many people thought was needed for a long time. And yes, I can distinquish between the difference of “can do it” and “did do it”. They’ve put together a great product thus far, and have done just about everything correctly up to this point. It’s just that their technology isn’t that valuable, their userbase I don’t view as being valuable, but their staff I do think is. You can buy that for far less than $30 Million.

    Buying Delicious got Yahoo into the bookmark folder of most the tech savvy people on the internet. Now that’s valuable. What does Yahoo gain from Digg besides eyeballs & the staff? Anything? Delicious & Digg are very similiar to one another and could easily be turned into each other. Why not just launch a new service for Delicious that let’s you rate other’s bookmarks? That will probably mean more eyeballs and won’t cost you a penny other than what you are already paying.

    I just don’t get it.

15. Danny
    

    January 26th, 2006 at 9:13 am

    Yahoo! is very smart. Digg is much larger (in terms of usage) than Flickr was at the time of the Flickr purchase, and it is fair to call that a successful acquisition. Different type of users, but still…

    And as other people have rightfully mentioned, Y! is very sensitive to competition in the social browsing/search sphere, which is where it currently stands above the crowd (and Google). This would remove a massive arrow from someone else’s quiver.

16. Matt
    

    January 26th, 2006 at 9:36 am

    What is Digg’s address and phone number?

17. Matt
    

    January 26th, 2006 at 10:12 am

    I highly doubt 30 million is accurate - everyone in the blogosphere claimed 30 million for Delicious, but it was actually in the mid teens.

18. digguser
    

    January 26th, 2006 at 12:19 pm

    Digg confirms report false
    http://diggtheblog.blogspot.co.....yahoo.html

19. Aladafa
    

    January 26th, 2006 at 1:21 pm

    According to an article on Business 2.0, based on recent high-profile web content deals, the value of a unique monthly website visitor currently hovers around $38 (the average purchase price per unique user of acquisitions during the past year). So if Digg is ever acquired, I will not be surprised by a deal over $30 million. Collective intelligence does make sense to me with promising upcomers like http://www.reddit.com, http://www.rrove.com, http://www.tagzania.com. Go Digg!

20. Pete Prodoehl
    

    January 26th, 2006 at 2:07 pm

    Kevin says: “…we are focused on features, not selling the company.”

    This tells us that their focus in on features, which is good, but this does not say that they would turn down any offers to buy the company. Just because something isn’t your focus doesn’t mean it’s something you won’t do.

21. Pugfugger
    

    January 26th, 2006 at 5:44 pm

    I’m addicted to Digg. but it seriously sucks. There’s a bunch of old crap that always shows up and lots of interesting/important things that don’t make it. There’s nothing to it that make’s it worth that much.

22. anon
    

    January 27th, 2006 at 7:49 am

    digg isn’t proprietary or original. but somehow they gained critical mass, and you can either build something and hope to achieve that yourself, or buy it like yahoo’s been doing. I and many others could build better digg-like sites, but can we amass the userbase? somehow, despite the maturity of the userbase being at the level of a 14-year-old, digg got bigg. I don’t think digg is worth $30m, not even $1m, but I don’t think the acquisition would be unfair or irrational. these guys put digg together, made it cool, got lucky, and now they may be cashing out big time, love ‘em or hate ‘em, but put the sour grapes aside. notice that most of the web 2.0 services that got bought up weren’t anything particularly special or proprietary - but if you agonize over coming up with “the next big thing”, you’ll come up with nothing. think of something cool, whether or not it’s been done, and build it for the pure joy of building it, and make it as cool as you can.

23. Tom
    

    January 27th, 2006 at 9:34 am

    For a commercial website, digg took 300k to load, no complex images no nothing, maybe im tripping out, but thats a damn unefficient site they got

24. Rory
    

    January 28th, 2006 at 11:17 am

    I feel that digg, is worth the 30 mil.
    I have heard person after person saying that they now go to digg.com for their tech news instead of going to Cnet.com or CNN( That also includes me). I mean come on,
    maybe im just baised because, Kevin Rose is my hero >:

25. steve
    

    March 31st, 2006 at 6:05 pm

    barrier of entry is very easy now. It just take 2 days of coding to create 50% of digg at http://www.opida.com

    just build it instead of buying it. :0

26. msoybausa
    

    May 21st, 2006 at 3:39 am

    wfmedpuc xvdbalouda cdpnjrvw