For Sale: Used Social Voting Site, Asking Price $300 Million, Goes By The Name Of Digg

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1. Troll
   

   December 17th, 2007 at 4:12 pm

   300M…what multiple is that of digg’s annual revenue?

2. CAR
   

   December 17th, 2007 at 4:14 pm

   Wow, congrats that is a high price. lucky for them, but i still think it is kinda low if you compare that one adult site was sold for a lot and digg is really popular and a good site.

3. syed
   

   December 17th, 2007 at 4:14 pm

   Whoo, is this for real?

4. SG
   

   December 17th, 2007 at 4:17 pm

   At $300mill = ~$75/registered user?

   ~250 mill page views/month
   –
   For the uninitiated and those who enjoy goldilocks analogies, where does this put the valuation of digg (too high, just right, too low)

   (I’m going off of some older numbers and fudged them a bit)

5. Faramarz
   

   December 17th, 2007 at 4:21 pm

   the $300m guarantees Rose fanboys will stay?

6. Rishi
   

   December 17th, 2007 at 4:24 pm

   The users should buy digg. That would be sweet.

7. AG
   

   December 17th, 2007 at 4:24 pm

   I think more important than the price itself is who purchases it. If the wrong company purchases Digg, hardcore Diggers will jump ship to other similar sites. It’s a tough buy because so few of the companies with $300 million to spare can actually convince the users to stick around after it’s sold off.

8. chrisw
   

   December 17th, 2007 at 4:31 pm

   I personally find most of the articles on Digg to be rubbish. I don’t frequent the site as often as I used to due to the high amount of useless articles that appear on the site. I consider myself a reasonable savvy, well educated user - the ‘norm’ I suspect. I can’t be the only person who thinks Digg is 90% crap and 10% ’sometimes’ worth reading.

   I doubt they’ll sell for anywhere near $300 Million. Has anyone ever tried watching an episode of Diggnation? Unbelievably bad!

9. Jared
   

   December 17th, 2007 at 4:34 pm

   The digg 2 years ago might of been worth some nice green. However, the digg today and morphed into a giant out of control community populated by trolls and non-tech people. Meaning it is completely opposite from how it used to be in its prime.

   It’s a damn shame the had to sell out and open it up to 3468376483764 other categories.

10. SG
    

    December 17th, 2007 at 4:38 pm

    @AG

    Good point - I can only imagine what would happen if, lets say for example, MS/_other_large_corporation_ purchased digg

    The furor over the DMCA issue several months ago comes to mind…

11. Diddy1
    

    December 17th, 2007 at 4:45 pm

    Now that might just get snatched up by the almighty Google!

    Thank You

12. K
    

    December 17th, 2007 at 4:46 pm

    1. Create crowdsourcing or social networking site.
    2. Make yourself visible and remind the users how much you love your job and them.
    3. Wait until userbase exceeds 10 million.
    4. Sell.
    5. Profit!

13. Angela Hayden
    

    December 17th, 2007 at 4:52 pm

    Please let digg know that I might be interested in purchasing them. Right after I make my next house mortgage and car payment.

    your fellow worker,
    angela hayden
    art goddess

14. Andrew
    

    December 17th, 2007 at 4:57 pm

    digg just isn’t that interesting anymore.

15. rfre
    

    December 17th, 2007 at 5:02 pm

    They should have sold it a few years ago when it was actually a cool site. Anyone have figures on how much ad revenue they are currently bringing in? I have a feeling it would take a very long time. Here’s my fuzzy math:

    250,000,000 pageviews x .02 (average clickthrough rate on ads) = 500,000 clicks per month @ $1 per click = $500,000/month = $6,000,000 a year in ad revenue. I guess it would take 50 years to make $300 mill. But that’s not putting a lot of things into consideration such as growth and increases in ad cost, additional monetization, etc. Does this sound right to anyone?

16. Ballmer
    

    December 17th, 2007 at 5:03 pm

    Waiting for it to go downa little more!

    fakesteveballmer.blogspot.com

17. HGuide
    

    December 17th, 2007 at 5:10 pm

    If the company is acquired and K Rose leaves, I think it will be a good thing. The guy has sort of this weird co-dependent following that makes visiting the site feel icky and awkward.

18. cbmeeks
    

    December 17th, 2007 at 5:15 pm

    Hey, I think I will pimp my site the same way Kevin Rose did.

    “Hey ladies and gents, there is this great site called Coders’ Hangout. It’s a place for programmers to hang out. So be to sure to visit *COUGH..mysite..*COUGH” Coders Hangout! They are da bomb!”

    http://codershangout.com

    Now, send me a check for $300 mil.

    Dang, it’s hard pimping a site when you have free publicity to millions….

    Yeah, I’m a little jealous.

    cbmeeks

19. chrisw
    

    December 17th, 2007 at 5:17 pm

    @rfre - isn’t $1 per click a bit high?

20. John Saber
    

    December 17th, 2007 at 5:24 pm

    Problems with Digg Structure is

    1) Most users are around and gone after few months, short-term loyalty with revolving door
    2) The front page posts are recycled news of web, nothing new there
    3) Getting to front page remains domain of power users
    4) Site has failed to innovate since forever
    5) Mob mentality crowd which creates abusive comment section
    6) Has not kept up fast web2 players like facebook, youtube, etc
    7) Model can be easily copied, and even improved on very quickly
    Has failed to create Killer app
    9) Lack of focus and lost that uniqueness of early success year
    10) That big old creepy house on web2 avenue, no one wants to buy

21. Michael
    

    December 17th, 2007 at 5:26 pm

    @rfre

    I think your head is in the right place, but your assumptions are way off. As chrisw notes above, $1 per click is very high (for content based plays, though not for actual search terms). More importantly, your estimate of 2% average CTR seems very high to me. That might be average CTR for some highly targeted ads (e.g. paid search), that is crazy high in my experience for a site like Digg.

22. Snyggast
    

    December 17th, 2007 at 5:27 pm

    Digg’s traffic has increased lately and most of 40 year old virgins from last year, aka tech heads, have disappeared. Stil 300M Peso es tu much dinero.

23. nerdboy
    

    December 17th, 2007 at 5:32 pm

    i get 25 million pageviews per month. i’d HAPPILY sell my site for 10% of $300M

24. mathew johnson
    

    December 17th, 2007 at 5:40 pm

    I heard that Rupert Murdoch is going to buy Digg and then start selling position on the first page to the highest bidders.

25. stone
    

    December 17th, 2007 at 5:48 pm

    $100M tops. No revenue and no real revenue model. Perhaps Microsoft buys them cuz their web business is terrible. Does anyone ever go to MSN.com?

26. Todd
    

    December 17th, 2007 at 5:54 pm

    @stone

    No.

27. rfre
    

    December 17th, 2007 at 5:55 pm

    I think your head is in the right place, but your assumptions are way off. As chrisw notes above, $1 per click is very high (for content based plays, though not for actual search terms). More importantly, your estimate of 2% average CTR seems very high to me. That might be average CTR for some highly targeted ads (e.g. paid search), that is crazy high in my experience for a site like Digg.

    @rfre - isn’t $1 per click a bit high?

    You guys are probably right. That makes a $300 million pricetag even more of a headscratcher.

28. Martin
    

    December 17th, 2007 at 6:10 pm

    Kevin Rose is hero worshipped over at digg but he can’t care too much about the community if he’s actively looking to sell it.

29. Joe M.
    

    December 17th, 2007 at 6:10 pm

    They will probably sell to the company out there that needs the eyeballs to show growth and that is the least in touch with the internet.

30. Wayne
    

    December 17th, 2007 at 6:11 pm

    John - I would disagree on at least one point…
    3) Getting to front page remains domain of power users

    Not true - at all!

    It’s a negative self-fulfilling prophecy to make that claim.

    I’m hardly a “power user” (submitted less than 40 stories). ~25% of them have gone to the front page, which is as good a ratio as some prolific diggers have.

    Now if you want to call me a “power user” since I’ve made the front page, so be it, but I think that’s pushing it a little bit.

    Now the interesting bit is this: All of those stories that have made the front page were my own content, from my own website, and it’s pretty clear that I was self-promoting my site.

    That’s right! I broke one of the biggest “rules” of Digg by submitting my own content as a story, and it still hit the front page! Go figure. Nowadays, I hardly get a chance to submit my articles anymore since they usually get picked up pretty quickly and submitted by other people.

    The fact remains that if you submit good, original, and intersting content to Digg (even if you break the “rules”) - it will hit the front page eventually.

    It’s worked just fine for me.

31. Patrick Grote
    

    December 17th, 2007 at 6:15 pm

    Wayne …. what is your site and your digg ID?

32. David Dines
    

    December 17th, 2007 at 6:45 pm

    It is amazing that many people miss the key fact that the only feasible business model for Web 2.0 sites is advertising. So the analysis by rfre is on the right track, though optimistic. This means that the $300M for Digg would require sky high P/E rations. I cannot think of any justification for paying a massive premium — even high growth has its limits and it is highly doubtful that they can dominate a sector like Google has.

    During Bubble 1.0 it was pretty clear that the valuations were based on vapor and I hope that we do not repeat the same mistakes and create a Bubble 2.0.

33. MMT
    

    December 17th, 2007 at 7:13 pm

    $300M is no more incredible than $15 billion for Facebook, perhaps even a bit more credible. They need to get off the Google AdSense crap though. Here’s another look at the math:

    250,000,000 x 10 epm (earnings per thousand) = $2.5 MM per month. That’s $30MM per year in revenue. Give it a valuation of 10x revenue and you’re looking at $300M. Any site that can’t get at least a 10 EPM is peddling rubbish.

34. Zoorope
    

    December 17th, 2007 at 7:14 pm

    Based on the first page “news” on Digg of today, it is more like many of the joke sites and the advertising pageviews on it are worth as much.

    I don’t see a real fit with any news organizations with this one.

    Why won’t the owners take the IPO route and let the markets decide if the company is worth 300 million or more?

35. Vivevtvivas
    

    December 17th, 2007 at 7:17 pm

    1.) Having looked into a Digg clone, Pligg, and wondering what the marketing/money model is on a rating site like this, the only conclusion was some sort of advertising model. Most opinions that I have read on this was that a voting site is a losing proposition for advertising like that.

    However, traffic does cure a lot of evils.

    2.) I think that this is probably more serious this time around given that Google is rumored to be starting some sort of social voting system for search results and the founders of Digg want to get out before they have nothing left of value.

    Ultimately I think that the “voting” system will be incorporated into the search engines directly and that Digg and Reddit and others like that will become the fads that they are.

36. fritz
    

    December 17th, 2007 at 7:48 pm

    who will buy them and why?
    i am totally perplexed the only company who might buy them maybe is a advertising firm since some of the info digg throws up is useful to gauge what is a samll fragment of the web following and this might help them with market analytics etc
    But I dont see a big internet player buying them since it will be a bad bad investment for them to justify but maybe a private equity will pick it up
    and their asking amount is way too much to be even justified with no revenue model

37. rfre
    

    December 17th, 2007 at 8:01 pm

    $300M is no more incredible than $15 billion for Facebook, perhaps even a bit more credible. They need to get off the Google AdSense crap though. Here’s another look at the math:

    250,000,000 x 10 epm (earnings per thousand) = $2.5 MM per month. That’s $30MM per year in revenue. Give it a valuation of 10x revenue and you’re looking at $300M. Any site that can’t get at least a 10 EPM is peddling rubbish.

    Yea, that makes sense. I forgot they partnered with Microsoft and are selling on a CPM basis. Highly targeted ads can probably fetch a $20 CPM or more. So I guess $300 million doesn’t sound so crazy afterall.

38. Tampa WebSite Design
    

    December 17th, 2007 at 8:03 pm

    300 Million only !!

39. Yo
    

    December 17th, 2007 at 8:06 pm

    Consider Digg a somewhat large community that has the tendency to visit sites that make it to the home page. How many visits a home page usually generates? I’ve heard about a few thousands… Perhaps 20,000 ~ 30,000 top? Multiply that by 4 to get to the high end: that’s your community. Nothing compared to what sites like Facebook or even less popular/buzzy sites generate. Digg is above all, buzz because when those 20~30k users “move”, the ground shakes, but it is still 20~30k or whatever the number ma be. It’s not millions. Not even one.

    So where all those other high numbers we sometimes read about come from? Millions of visits, and reg.users, etc…

    My guess is that everyone and their dogs are submitting content to Digg. They’re not really loyal, frequent Digg users, they don’t read the home page or anything else for that matter, they just submit stuff… Then they reload those pages again and again to check those counters… Sometimes some groups may submit and digg each other. Again, no value to the site other than gaining page views, as those activities mean little or nothing to Digg other than accumulating page views. So my guess is that the majority of people who visit Digg do not READ Digg.

    If a company is interested in Digg, they will ask for all those numbers and more. They will get a much better picture of what’s going on than my little conspiracy theory. If those numbers had been actually good, Google, Yahoo, MS et al would have not let it go. But they did. So I’m going to think that what I’m saying, though it might be somewhat off, it’s not by miles.

40. Mark Zawacki
    

    December 17th, 2007 at 8:45 pm

    There is an old M&A adage ‘companies are bought, not sold’. Hiring an investment banker to shop it sounds desperate. If there were a buyer, one would quietly retain a banker and get a deal done. The noise around this deal sounds like fishing/hype… and we all keep saying Bubble 2.0 is near, right?

41. omer
    

    December 17th, 2007 at 8:58 pm

    if Digg is worth $300 million (or Facebook worth $15 bn) then all the subprime mortgage CDO’s are money good. It’s interesting how investors never learn from their mistakes.

42. Wes
    

    December 17th, 2007 at 9:10 pm

    I think you need a lot more data about Digg to be able to evaluate the price range. Using guesses while good for discussion it will not give a clear idea without the actual figures.

43. George
    

    December 17th, 2007 at 9:11 pm

    I agree with Mark @40. This reeks of desperation. The great Web 2.0 ponzi scheme marches on.

44. David
    

    December 17th, 2007 at 9:58 pm

    If anyone can make that happen, it’s Allen & Co. They’ve been behind some of the bigger Internet and New Media deals of the past few years, but have chosen to stay out of the limelight.

45. Dale
    

    December 17th, 2007 at 10:27 pm

    Wow, That would be an amazing buy, Bill Gates maybe

    if it is for real

    Dale
    http://dzrbenson.com/blog/

46. Sipboy
    

    December 17th, 2007 at 11:12 pm

    I just don’t see it. But hey…..I am not an expert. Good luck to them anyway. Get it while you can. Whoever buys them clearly are looking to buy the user base because digg is not what it used to be.

47. S70P
    

    December 17th, 2007 at 11:20 pm

    Ok, say Digg was what is was a few years ago when it started, we all knew and loved Rose for it. Just like everything else on the internet it is/did eventually get ‘old’. There was no reason for the original users to stay active there and has slowly gone down hill. You can obviously tell that 40 somethings with way to much money are trolling the internet looking for stuff to buy. Digg is a household name these days but why? I used to check everyday even hour for new diggs that were real. Now i click on a digg and it’s a picture of a cat. If they get $300m fir that site great deal for them, buy a new computer. I doubt it will happen. Internet rumors come, cause a big deal and then fade away. We’ve heard about Digg allegedly being sold then you never hear about it again. I’m not saying it won’t, it will ofcorse but not for $300m, one of their sons will slap their dad in the face for buying Digg because they wont be able to turn it into anything.

48. uploadchoice
    

    December 17th, 2007 at 11:22 pm

    $300M seems to be very high prize considering the deal.

49. Mark Mayhew
    

    December 17th, 2007 at 11:25 pm

    digg has it’s “digg this” buttons everywhere, including I think the New York Times, but $300M? I used to like digg, I hardly ever go (since Facebook grew)

50. YDRIVE
    

    December 18th, 2007 at 12:11 am

    Right price. Right choice. Digg on.

51. ghost
    

    December 18th, 2007 at 12:19 am

    Then again, google did buy YouTube for a measly $1.8 Trill. you never know what one of the “internet superpowers” will do to get ahold of something that influences so many peoples on the internet

52. I Am Not Posting To Spam My Blog
    

    December 18th, 2007 at 2:24 am

    $300m? Hell no. I could buy 750,000 Kindles with that.

53. John
    

    December 18th, 2007 at 3:47 am

    From my stuff thats been frontpaged, Digg click-through is more like .002

54. psychic
    

    December 18th, 2007 at 4:28 am

    thanks for the information and happy holidays

55. Charlie Anzman
    

    December 18th, 2007 at 4:29 am

    Long overdue!

56. Vivevtvivas
    

    December 18th, 2007 at 5:08 am

    Mark wrote: “There is an old M&A adage ‘companies are bought, not sold’. Hiring an investment banker to shop it sounds desperate. If there were a buyer, one would quietly retain a banker and get a deal done. The noise around this deal sounds like fishing/hype… and we all keep saying Bubble 2.0 is near, right?”

    That is the first thing that I thought too, that this smells like desperation to get out before the big guns ruin the “business model”.

57. Daniel
    

    December 18th, 2007 at 5:37 am

    If i was intel or IBM or something i would buy it… lots of banner impressions on a tech savy crowd :-))

58. Jason
    

    December 18th, 2007 at 5:58 am

    Daniel, you also aren’t in touch with reality. Digg is and has always been a worthless site. $300 million with absolutely zero revenue is ridiculous and no one will pay that. Banner impressions don’t mean shit with that demographic.

59. armygames
    

    December 18th, 2007 at 6:24 am

    In this site you can find all the information about us army games. It`s a social responsability site….

    usarmyallamericangame.info

60. the Guy Behind you
    

    December 18th, 2007 at 6:32 am

    Digg is not worth that money, check out this article.

    http://www.binaryaspects.com/2.....udy-shows/

61. cbmeeks
    

    December 18th, 2007 at 6:35 am

    @omer

    “f Digg is worth $300 million (or Facebook worth $15 bn) then all the subprime mortgage CDO’s are money good. It’s interesting how investors never learn from their mistakes.”

    HAHAHA. Amen brother.
    http://codershangout.com

62. Jason
    

    December 18th, 2007 at 6:51 am

    @the Guy Behind you

    Hilarious.

63. androo
    

    December 18th, 2007 at 7:07 am

    if they offered it for sale piece by piece to the public (like shares of stock) i’d consider investing… however there are tons of similar sites out there that are free! (pligg to name one) it just takes a little time, money and brain power to create your own version of digg…

64. googlefan
    

    December 18th, 2007 at 8:27 am

    if google got, it would end up like youtube *under federal survellience*

65. Squidreturns
    

    December 18th, 2007 at 8:30 am

    Kevin Rose is a Cmdr Taco Wannabe with a touch of ADD and a smidge of whoring out someone else’s ideas.

    Shoulda sold the month his smug mug soiled the mainstream news rack. Now he’s a has-been and doesn’t know it.

66. etavitom
    

    December 18th, 2007 at 8:51 am

    it’s worth more! digg is the best resource for news on the web.

67. peter guszti
    

    December 18th, 2007 at 10:08 am

    Yeah, I heard Kevin is going to work more on his new websites, pounce and http://www.opentopix.com

68. Joshua Walters
    

    December 18th, 2007 at 1:14 pm

    Kevin, I have said it before, if you dare sell digg, I will personally organize the mob that will come and hunt you down, demanding you start a new project.

    I personally like digg as it is. I dont want some company coming along and changing it. The fact that I have what would equate to a man crush on Kevin Rose has nothing to do with it lol

69. Kikerberg
    

    December 18th, 2007 at 1:17 pm

    Digg is a bunch of Mactards and Linux lunatics in their parents’ basement.

70. Steven Biars
    

    December 18th, 2007 at 1:39 pm

    Keep in mind that 250m views a month will earn a lot of money. Some of you have calculated the average clicks / revenue they can expect. However, you’re forgetting one important thing.

    Sites can earn money from ad views even if the ads aren’t clicked.

71. Jeremy Steele
    

    December 18th, 2007 at 9:12 pm

    The real question is how much would the price go down if Kevin Rose left?

72. Power
    

    December 22nd, 2007 at 4:37 pm

    I have $59 USD !! Missing 299,999,941 USD to Buy it

73. Krunal Chauhan
    

    January 9th, 2008 at 11:48 am

    I would say Digg is Good for sure .. but worth this much ..
    If digg comes up with some innovative they for sure will have good market