Digg’s latest funding round valued the company at “around $175 million” we’ve heard from a source with knowledge of the deal. The company raised nearly $29 million in the round, which was announced earlier this month.
The valuation seems about right for the company, which attracted 15.7 million worldwide visitors in August, up from 10.1 million a year ago (Comscore) (click here for Quantcast data, which shows much higher traffic). The financing was a second choice for Digg, which thought it was getting bought by Google for $200 million until a last minute glitch killed the deal. After it was clear the deal wasn’t going to happen, the company pursued a financing instead.
We’ve also confirmed that founder Kevin Rose and CEO Jay Adelson sold some personal stock in the transaction, as GigaOm first reported. However, our sources say the dollar amount they each took off the table was relatively small, about $2 million each, and that the venture capitalists had an appetite for more (since they’re the ones buying the stock). That’s good news for the company because it shows Kevin and Jay, at least, think the valuation was low, and were willing to keep their stock in play.
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what kind of offer would digg need to make a ROI for it’s VC’s.. anyone?
After this valuation, I’d say about $300Million. It’s a ridiculous valuation.
sell now and take 175 million
i dont see why they are holding out for more
They can’t sell for that much. The problem is they’re not worth much.
had no idea it was this popular!
http://cashtutor.blogspot.com
@saneyuki,
Digg pretty much loses money, only lately did they make any money but now the site is so slow to load due to the flash ads.
The cost of paying Adelson to sell / spin doctor the place and the servers out run the advertising.
@Paul Jensen,
Bebo was bought in the last 6 months for 800 million. Digg is worthless.
@Lance,
Do you see anyone else here using sig files?
As far as Slashdot, too tech oriented and it is tougher to get accepted by Slashdot than front page on Digg.
The be company to buy right now is StumbleUpon, AOL is trying to dump it right now.
As far as a revenue model, why not AdSense and give the users a decent cut, like 50%, that would be huge and everyone would love it.
Remove the bury buttons, evict the Digg mafia, remove the shout / spam app and share a little with the people like us who made Digg.
Ebay owns stumbleupon.
You think you are smart.
Digg sucks ass.
You are a moron.
Digg has sent me around 90k unique visits in a Sunday. So, their monthly traffic must be much larger than 15 millon.
Digg has something like 27 million registered users.
If half the accounts are dead and the other half post twice a week that is like 108 million visits a month.
But here is the difference in visitors.
Uniques, that is a first time visit and then they are not counted after that. PageViews, that is how many times a page is loaded. Visits, overall traffic by unique IP address or based on cookies. You probably already know this.
When sites quote traffic numbers they usually do it in a way that makes it sound better than it is. So you really have to drill down a bit and find their criteria before deciding what they are really talking about.
Uniques is where it is at as far as real numbers.
Digg does not have anywhere near 27 million users. The most popular story in the last year has just over 30,000 diggs. If digg had even 1 million users that would mean the *most* popular story in the last year appealed to just 3% of users and to get a story frontpaged only 0.02% of users need to like it.
I would guess they have 50,000 - 100,000 active users at the most, and that’s a generous estimate since most front paged stories have mere hundreds of diggs and comments.
Their real value is in the traffic and that’s purely because Google positions digg pages ridiculously high in search results compared to the value they bring Google’s users.
“The valuation seems about right for the company” - why????
If Google did not value it at 200 M, and obviously digg would have sold for 175, then how is the valuation right? I am not sure what the justification is here …
Oh I don tknow, you have an international growth market of multiple languages, Ithink somewhere north of 1 billion when they go public in 3 years, so I would not sell either ….
Oops, Digg banked at Wamu, and now they have $100,000 of the 200M left thanks to FDIC. I nearly spat out my coffee this morning. I do my startup and personal banking there.
Great depression here we come.
At least it’s better than Canada. Anything but french babbling and stupidity relabeled as a culture, ANYTHING. Even death.
The value is too low, I was expecting more !!
What are they worth?
About $80-90Million.
Even this figure is too high. Digg hasn’t generated any profits. Tech IPO is dead, and M and A has virtually stopped, so there’s no exit strategy for digg.
If you spend exponentially on hardware, for linear growth in ad revenue ads, then its a losing proposition.
so with 0 profits, and a failed business model, the company should be worth 0. Only a sucker would buy this company, but I guess even in tech, a sucker is born every 10^12 CPU cycles.
This is fine.
They have more upside in traffic.
… so, how much money is digg making right now?
$1 trillion… indian rupees.
Gone are the days when companies were valued based on EBITDA. I am hedging that the tech will be the next industry to experience the same fate as the housing. The writing is on the wall.
1. Ridicilous, valuations (see Lehman)
2. Oversupply of startups (see housing)
.. seriously, how much money are they making right now? im curious.
Digg has publicly said that they were profitable, I don’t see why Digg felt the need to raise another round. They should have just kept on doing what they were doing and eventually get bought out. This round will do anything but rush an exit, I feel like it was done purely to cash out some founder stock
Can anyone comment on their monetization strategy outside of online Ad revenues - which is a good one - just wondering if I was missing anything? Do you think they would ever go with a paid placement for a news feed - like sponsored article? Just curious to hear what others think they could do to make money off of all that traffic.
As a side note the good thing is their deal closed before the markets went nutty - so great timing for them for sure.
Cheers - Eric
I just noticed Digg Alexa rank is 202 today, but it was 118 some time ago?
i think,it’s more than this.
—————————
Domain name search tool
http://domain120.com
Google should buy Slashdot instead of Digg. A mafia controls Digg, but Slashdot has less bias.
Reddit is a far better product anyways
I remember when Digg was gunning for a $300m valuation… how times change.
I don’t know if the valuation is correct, but it’s sure are a lot of money
Probably close to being tapped out by VC’s… I don’t expect a buy out above $250M.
Even $200M was too much…
so.. um… does ANYONE know how much they are making? is it like 1 million bux a year, a quarter, a month, a day?
because with a 175million valuation, there doesnt seem to be any sort of crisis at all? http://www.techcrunch.com/2008.....ic-crisis/
$175million thats almost a quarter of a way to a billion! thats a BILLION! thats a lot of ferraris
can anyone take a guess? pretty please?
Digg is atrocious. It’s swarmed by power users and fanboys, making the “community aspects” of the site completely useless. Have a story you want to submit? Not going to hit first page unless it’s lolcats, anti republican garbage, boobs, pro-mac pro-linux pro-ps3 or something pro-enviroment.
I would be happy to see that value drop, but even happier to see the company fold.
Any company in their right mind can see Diggs problems and would never acquire it.
DIGG deleted my account before and said I was spamming, just for submitting my own blog posts to them as a submission, when I was new to their service and knew nothing about how their site worked. DIGG first responded to me saying “my account was still active, go ahead and log in” when I wasn’t able to. Then, “DIGG” backtracked that and said I was in violation of their policies and the decision was final. When I asked again why was it deleted, they didn’t respond with any details. I told them I was new to DIGG submission service, and they totally blew me off. What JaCk@$$es!
So, I’m glad they lost the deal with Google. That’s what they get. Go back to the drawing boars @$$e$!!
lol
oops I meant to say “board” not boars…lol
typo..:-P
wow. Thats alot of money for a website that was create just for a test with Kevin Rose and Jay Adelson But 175 million dollars? Thats good value for a website. Digg has become very popular over the years and I think it will always be popular. I gotta go to digg again, its a great community. I was so close to seeing kevin rose in person, but lost the chance
Wow that seems like a WHOLE lotta money for a database site!
Jiff
http://www.privacy-center.ru.tc
Digg definitely worth more than that
the d-bags at digg have no sense of humor
FilthyRichmond.com
thats ridiculous man
“an appetite for more?” Nobody seems to be calling me, I have plenty of shares.
wow, all that money for a site that is just gibberish, and little left-wingers desperately try to justify their distorted view by digging things up .
$175 million for site like digg…. that’s way too much…google did the right of stepping out of the deal… digg has a few people who just games the system…
Congrats to the guys at Digg. I think its a smart do, when the current recession valuation mutiples have probably peaked.
The price people are willing to pay for websites are strictly theoretical … if others can get 100’s of millions, digg is worth more.
Perhaps the domain name alone is worth upwards of a million, that doesn’t include any of the backend or the 7 figures of traffic daily they get.
Do people here read the news about Wall Street and the rest of the company and not connect the dots to this sort of thing? Everyone praises Digg and says Kevin and Jay are great guys, etc. I’m sure in the banking circles, people always had great things to say about hard-working Stephen Rotella and Alan Fishman of WaMu, and, by all accounts, most people who banked there loved the company. Unfortunately, the business sucked. Sounds familiar? Too bad the feds don’t bail out startups.
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this are bad times in economy
didn’t they use be valuated @$300M.
Nat
http://www.workersinc.com
DIGG Deserves More Than $175 Million….
DIGG Rocks …
- Anurag R.C.
http://www.pcdrome.com
Latest Post:
http://www.pcdrome.com/2008/09.....your-time/
Im interested to see that Digg has a much decreased price tag. Over at Crenk we previously wrote a short article about why they cant sell!! http://crenk.com/digg-why-the-.....r-company/
Kevin should just keep digg and build around it. its a great company and the first with the great concept. As much you can argue.. it never gets old.
Wow….they could retire comfortably.
I personnally think that they are worth much more.