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June 24, 2007

Revision3 Raises $8 million From Greylock

Michael Arrington

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Online video site Revision3 has raised an $8 million second round of financing, according to a source close to the deal, bringing the total capital raised to $9 million. Our understanding is that Greylock led the round. Greylock was also the primary investor in Revision3’s $1 million first round of financing. News startup Digg, which shares founders Kevin Rose and Jay Adelson with Revision3, also raised money twice from Greylock.

Revision3 now has exclusive rights to ten shows and is continuing to add more talent over time. Diggnation, however, is by far the largest and most popular. Revenue is generated via integrated advertising, where the show hosts discuss the advertised products directly.

This rumor has not yet been confirmed by the company, who isn’t responding to our request for comment. Our source also says that CEO Jay Adelson may soon be stepping aside and focusing exclusively on Digg, which he also runs. The company may have already begun a new CEO search.

Sample show below from PixelPerfect, another popular show:

  • Sphere It

This entry was posted on Sunday, June 24th, 2007 at 3:06 am and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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  1. at beta

    June 24th, 2007 at 10:26 am

  2. GigaCrunch » Greylock invests $8M in Revision3, but why so little?

    June 24th, 2007 at 2:02 pm

  3. techcrunch » Blog Archive » Kevin Rose’s New Startup: Pownce

    August 14th, 2007 at 5:18 am

  4. Techs Or More » Blog Archive » Revision3 Raises $8 million From Greylock

    October 29th, 2007 at 4:28 am

Comments

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  1. Edwin Postwin

    June 24th, 2007 at 3:47 am

    Anil Bhusri is an I-banker, not a VC. Joost will kick butt of revision. I heard that he Hellman and Kaiser are not happy with him. This is an another copy cat idea. Good at late stage deals, Greylock is.

  2. Shawn

    June 24th, 2007 at 4:15 am

    Edwin do you even know what Revision3 does and the difference between them and Joost? Revision3 has a dedicated core audience that’s growing, Joost is more mainstream media, unfocused, over hyped, and is frankly as appealing to me as cable. Even if Joost is more successful this could be a good deal for Greylock, podcasting, iptv, is still in the early stages.

  3. Darren Stuart

    June 24th, 2007 at 4:22 am

    I wonder if this is such a good bet.

    What happens when the 14 year old kids grow up and leave digg and therefore diggnation(The Dumb and Dumber of video podcasting)?

  4. Halley Suitt

    June 24th, 2007 at 4:23 am

    Does it really require $8M to do online video?!?

    I have this crazy notion that building a company with revenue, especially when cool and creative video is actually CHEAP to make and advertisers do want to spend money on online advertising more than ever, that you could make a go of it without so much funding.

    A few friends and I actually believe that. We’ll be launching ZINDICATE soon. Watch.

  5. Allen Stern

    June 24th, 2007 at 4:47 am

    #3 Darren - I am with you.

    #0 Mike :) - I would bet Jay goes fulltime on Rev3 based on his comments at the FOOA. I kept saying to myself when he spoke, “this is where he believes the money is”

    The issue with revision3 in my eyes is that they look like “the digg tv channel” and other shows are almost non-existent. And the digg tv show is about pushing products for 30 minutes.

  6. Darren Stuart

    June 24th, 2007 at 5:47 am

    another thought on this is what happens when Kevin Rose makes a fat wade of cash from the sale of digg and does not want to do diggnation? Also with such a tie in to digg as Allen says what happens when the new digg owners (share holders or buyout) demand payment for use of the name digg?

    I get the feeling someone has not thought this whole venture through…

  7. Sebastian

    June 24th, 2007 at 5:48 am

    Are they a content producer or plattform, or aim to be both? Eitherway, I am surprised that they need 8 million.

  8. Allen Stern

    June 24th, 2007 at 5:54 am

    #7 sebastian - at the fooa, he said “Revision3 is an Internet Television Network”

    I recorded his talk on video - he says the part about rev3 definition at about the 1 minute mark:
    http://www.centernetworks.com/.....elson-digg

    What’s funny is that he says at the beginning “this won’t be about my businesses” - yet the next 20 minutes is :)

  9. Jason Jenkins

    June 24th, 2007 at 7:47 am

    I like Revision3, that have a great business model in fact that they create their own content. Proprietary content always gives a content provider more options to generate revenue over the long term (even outside of the inet). BTW, shout out to Patricia for inviting me back, i promise to behave.

  10. What's innovation for revision3?

    June 24th, 2007 at 7:55 am

    Okay… Okay…

    I get it…. California can get VCs. What is innovation for Revision3?

    Why reinventing ajax adobe or Microsoft word graphics?

  11. heri

    June 24th, 2007 at 8:44 am

    i wonder noone says a word about the hosts advertising products in their shows, and then bloggers are criticising payperpost or Federeated Media/Microsoft for paying bloggers to advertise their products. talk about 2 different scales

  12. Matt Jones

    June 24th, 2007 at 9:30 am

    My Blog is For Sale! The Details are on the HomePage I entered.

  13. Amit Chowdhry

    June 24th, 2007 at 9:38 am

    Heri,
    The difference is that the host of the videos in shows like Diggnation aren’t biased towards the products being advertised by the programs. They are strictly sticking to their own opinion.

    For example,
    Microsoft Zune advertises on Revision3 shows. Yet in Diggnation, Kevin Rose openly admits that he prefers Apple products over Microsoft’s. However, the other host, Alex Albrecht openly admits liking the upcoming product made by Microsoft called the Surface.

    But for PayPerPost:
    “it allows advertisers to demand positive writeups, and they do not require bloggers to disclose within the post itself that it is sponsored text.”
    http://www.techcrunch.com/2007.....eir-price/

    There’s a difference.

  14. Allen Stern

    June 24th, 2007 at 9:45 am

    Amit - the question that you raise will always be there. In fact, Donna “i ask too many questions” bogatin asked that question of Jay. And Ryan basically pushed it off and moved the questioning along. Unfortunately my battery on the camera died and I didn’t get that part on tape.

  15. Zaid

    June 24th, 2007 at 9:55 am

    Anyone else wonder if revision3 and digg might have conflict of interests in future? I’d thought all along that digg investors were cool with it because it’s an entity of digg in some way. And really, going from a text-based news site in Digg to video digg is not that far of a stretch.

  16. Jason Jenkins

    June 24th, 2007 at 9:58 am

    #8 im right with you, why does it take 8 million dollars to produce these shows?

  17. tien nguyen

    June 24th, 2007 at 11:20 am

    Give me $50 and a nice server and I’ll make some great online shows.

  18. Niklas

    June 24th, 2007 at 11:24 am

    I really like most of their shows, but I really hate how small streaming video they have. Some of the shows are on stage6 in good resolution, but those aren’t updated that often which sucks. They should either change their flash player to be at least twice as big, or start uploading the videos to stage6 faster. (I’m not really sure if it’s them/authorized users that are uploading the videos to stage6, but I assume so.)

  19. dale

    June 24th, 2007 at 11:48 am

    revision 3 rules. it is an awesome concept!

  20. eBooksBay

    June 24th, 2007 at 12:39 pm

    Cool, revision 3 rules.
    http://www.ebooksbay.org

  21. Google Ruins Pay Per Click

    June 24th, 2007 at 1:15 pm

    At least this is easier to believe than the supposed 7 million that payperpost raised however me and my 15 friends still haven’t been paid for a single post lol so we pulled their links.

  22. drew olanoff

    June 24th, 2007 at 2:05 pm

    indigital and CTRL-Alt-Chicken are pretty sweet shows. The last CTRLAC was about frying crabcakes. Need i say more? Heh.

  23. Jason Sanzone

    June 24th, 2007 at 3:08 pm

    They have a nice network, but I don’t know what in the world they would need 8m for..

  24. Jeremy Wright

    June 24th, 2007 at 3:23 pm

    #17, tien: Done. Hell, I’ll give you $100/month/show with an entire cluster of servers! Oh, wait, you want real money for you time? And you need sounds? And video effects? And editors? And a producer? And voiceover people?

    Even with small teams, the average well-done web show costs 250-300K/year. If Revision3’s looking to do 20 shows, and own the infrastructure, 8M sounds about right for 18-24 months of burn.

  25. Andrew H

    June 24th, 2007 at 3:34 pm

    @Niklas if you choose the quicktime download now button to the right of the shows it opens h.264 stream that is 2-3 times larger than the flash video on the web page .

  26. TB

    June 24th, 2007 at 4:35 pm

    The world would be a better place if $8m was put to a company that actually produced quality, relevant content rather than just “some guy” rambling about technology. Where’s the innovation — the creativity — the uniqueness?

    But again, Revision 3 is about selling ads — and so as long (lesser educated) people watch the content there will always be a place for Revision 3 in the world. Similar to how those tabloids have their place in the grocery store checkout lines.

  27. Jason Jenkins

    June 24th, 2007 at 4:46 pm

    #24
    250/300k per year for a good web show is still high in my opinion. We have been producing well done content for the web since 98 and I we may have spent that much over a nine year period in production and the traffic to our content speaks for itself. I couldn’t imagine having 300k per year to produce a single show, let alone 9 mil to run the entire network.

  28. Von Glitschka

    June 24th, 2007 at 4:49 pm

    How about taking some of that 8million in VC and investing it in a logo that looks professional. What they have is lame.

  29. Thomas

    June 24th, 2007 at 5:08 pm

    there was once this network called G4 that was a lot like this….whatever happened to that network? …every time i tune into it, all i get are reruns of “Cops” and “Cheaters”…i guess there wasn’t enough geeks to support it..

  30. Charlie Rockwave

    June 24th, 2007 at 5:45 pm

    I have been watching DiggNation and the Totally Rad Show once in a while on Rev3 and I think that the shows are not bad. But the business model really fascinated me from the moment I happened upon the site.

    I am glad to see that they got some serious cash to further develop Rev3!

    It will be interesting to watch this evolve.

    http://www.aidrop.jp/en/blog

  31. dave mcclure

    June 24th, 2007 at 10:04 pm

    congrats to Jay & team… here’s to more reasons to never leave my computer :)

  32. Free Nature Photography Wallpaper

    June 24th, 2007 at 11:07 pm

    wow, cant wait to hear the official press release!

  33. steve

    June 25th, 2007 at 5:32 am

    8million does seem a lot for online video content that is mostly of the talking head nature, but here’s what I think the cash buys them.

  34. Concrete Stain

    June 25th, 2007 at 1:03 pm

    8 Million for video /

    - I bet YouTube was losing 100k/ month till - Google bought it.

    - Bandwidth is cheap for now / but if it (rev3) ever catches on - it will have more eyeballs than it can sell (at a decent rate)

    - Look at the terrible Myspace ads; This is a result of Eyeball inflation.

  35. Tim

    June 27th, 2007 at 8:16 pm

    I don’t know who did the motion GFX on your little intro there, but you guys should spend a little bit of that $8M to keep him/her on board. It’s actually some amazing work. Who’s the artist?

  36. THE SEEKER

    June 30th, 2007 at 4:29 pm

    IS GREYLOCK AWARE THAT REVISION3 IS LYING ABOUT THEIR SUBSCRIBERS? THAT THEY CENSOR THEIR COMMUNITIES? THAT THEY DO THE WORST COMMERCIALS? Digg and Revision3 are the new dot bomb. They censored my posts because I had said that I thought an episode wasn’t that good. And they kicked me off for saying I didn’t like a host of one of their awful programs. I didn’t flame them or anything. If they treat their communities like that there will be no Revision 3 after they burn through all that money. I wouldn’t give any money to a drunk guy and his looser friends. What a scam.

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