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Digg Raises More Cash: $28.7 million

     
5:53 pm on Sep 24, 2008 (gmt 0)

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Digg Raises [bits.blogs.nytimes.com]More Cash
Digg, the news site with the nerve to substitute the votes of the unwashed, unpaid masses for the refined talent of professional editors, has raised a new round of venture financing, the company said Wednesday.Four-year old Digg, based in San Francisco, raised $28.7 million from existing venture backers Greylock Partners, Silicon Valley Bank and the Omidyar Network.
8:37 am on Sept 25, 2008 (gmt 0)

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Major Expansion [blog.digg.com] at Digg
Today is a big day for Digg. We’re announcing a major expansion effort – the largest we’ve undergone in our history. With a new round of funding, we’re accelerating many of the programs that we’ve been working on over the past several months, including investments in infrastructure, new feature development, international expansion and hiring all the people we need to get there.

10:01 am on Sept 25, 2008 (gmt 0)

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Getting $30 million investment off linking to 3rd party content posted by non-employees working for you = priceless.

Wow did I go into the wrong end of this industry or what!

11:31 am on Sept 25, 2008 (gmt 0)

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I am surprised. Their costs can't be that much and they have advertising
11:36 am on Sept 25, 2008 (gmt 0)

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It's crazy stuff - $30 mln is a LOT of money (if spent wisely), this kind of investments makes in my view subprime loans look triple A class.
12:17 pm on Sept 25, 2008 (gmt 0)

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Wow did I go into the wrong end of this industry or what!

But how long before every community website has its own Digg clone script?
12:22 pm on Sept 25, 2008 (gmt 0)

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Wow. I didn't think folks really used Digg that much anymore. Well, I mean the general population. I know it is a haven for webmasters to promote their sites.

When we added the Digg link to our pages last year, no one knew who or what it was. We ended up removing it.

Good for them. Hope they can capilaize on it.

So did I read that article right, does Digg now use professional editors instead of the voting masses?

1:10 pm on Sept 25, 2008 (gmt 0)

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But how long before every community website has its own Digg clone script?

They pretty much already do. Most of the large community CMS packages have Digg-like extensions available. The problem is getting the eyeballs on site, and getting those eyeballs to actively work with the fingers to create participation. For a "Digg-Like-Object" to work, you need a base critical mass of participation, and a much larger one than you might think.

Also, Digg the Company is bigger than the Digg site. Digg Nation (the webisodic show) has a small, but very focused and "advertiser friendly" audience. They also have a number of other properties that are doing well.

Still, when I see $28.7 mil in additional funding to a company with only a vaguely defined revenue model, that old nineties phrase comes to mind - Burn Rate.

1:18 pm on Sept 25, 2008 (gmt 0)

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Perhaps I am not the social type, but the sense of all this websites that carry a "social" in their description - social bookmarks, social networking, social whatever - escapes me. Total waste of time in my opinion.

Maybe with 30something I have already reached the age where one starts to disconnect with new developments and technologies. Not very long and I will need the help of little children to install and configure my household equipment.

2:02 pm on Sept 25, 2008 (gmt 0)

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the sense of all this websites that carry a "social" in their description - social bookmarks, social networking, social whatever - escapes me. Total waste of time in my opinion.

No no no, this is so wrong! Adding "social" to website in this case greatly increases amount of money they can raise! Do you really think they'd get a $30 mln (after other investments) if they were not social web 2.0 blah -blah-blah money losing entity? :)

2:18 pm on Sept 25, 2008 (gmt 0)

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Automattic (WordPress, Akismet, Gravatars, etc.) got similar funding last year and it's still not apparent what they are doing with it. They seem to have doubled their number of employees recently though.

Wasn't there talk of ebay selling off stumbleupon recently?
This seems to contradict the trend.

[edited by: amznVibe at 2:20 pm (utc) on Sep. 25, 2008]

3:03 pm on Sept 25, 2008 (gmt 0)

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Automattic (WordPress, Akismet, Gravatars, etc.) got similar funding last year and it's still not apparent what they are doing with it. They seem to have doubled their number of employees recently though

Wordpress seems to be doing quite well in their blogging business. Many folks who can't host their own utilize their online version, which has many "pay per feature" options.

I think the Gravatar purchase was to save their own infrastructure of avatars. An investment in the stability of their product.

3:21 pm on Sept 25, 2008 (gmt 0)

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Digg used to be a good site, when they had foces on Tech stories. Now all I see reddit front page (12-18 hrs later) + Email forwarding pictures and stories. The truth is most media site like Slashdot and digg will continue to loss market share to small sites and bloggers for breaking news. There ad quality is also very low, that clearly suggests they are struggling. Also, clone sites in other countries are eating up their share.
3:54 am on Sept 26, 2008 (gmt 0)

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I used to Digg a lot but had not been there for over a year. Checked in yesterday to see what was up and was disappointed. Time was you could go there and just see amazing stuff every day on the front page. People were digging up science stories, adventure stories, cool new gadgets, strange happenings around the world, plus tons of quality websites that were previously undiscovered. Check this out! check that out! A site all about optical illusions! A site run by some nut who explores subways. You name it, it was there. It was a goldmine of internet surfing.

What I'm seeing now is just editorial comment on the big news stories, with stereotypic list-of-ten linkbait mixed in for good measure.

Is that really how it is these days, or did I just pick a bad day?

7:04 am on Sept 26, 2008 (gmt 0)

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Automattic (WordPress) make their money from hosted services. Thousands of ppl pay them $$/monthly fees to get hosted.

Digg on the otherhand is another story, the userbase is complete junk, they don't ever click on ads (most of them use ad blockers), they don't buy anything (promote warez/against DRM, support PirateBay etc). I have to give them one thing, the site is entertaining, people post funny/interesting stories on there and its a real traffic generator but in terms of making money, I don't think Digg will ever get there.

12:28 pm on Sept 26, 2008 (gmt 0)

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I do believe they are up to something big. Why? Prior to the influx of funding, Digg performed a major cleanup of its top users and I do mean major! The SM world is full of topics related to the Top Diggers being banned permanently with no consideration for reinstatement. And, we are talking some of the biggest names on Digg that are now banned forever.

Shortly after that fiasco, this announcement on the funding. Something is up...

I'm dabbling in the Social Media thing now and I haven't made my way over to Digg yet, probably won't either. I like the smaller niche Social Media sites where there is still a chance to interact and not get caught up in the politics of it all. And yes, there are more politics in Social Media than there are in the U.S. Government.

$28.7 Million Dollars! That is nothing to sneeze at for sure. I think that money would be best spent revamping the entire voting model and bringing in some more bodies to get more of the human element involved. I think many are realizing that you can't rely on algos and automation to grow these types of communities, it doesn't work in the long run. Someone mentioned above that they are adding bodies to their staff, something is up and I'm sure we'll know soon enough. After the Digg Banning topics take a back seat to the latest news, I'm expecting another big announcement to come before the holidays. Everyone likes to do stuff towards the end of the year. ;)

[edited by: pageoneresults at 12:29 pm (utc) on Sep. 26, 2008]

12:29 pm on Sept 26, 2008 (gmt 0)

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Just 4 years in business, and raising $28.7 million. Awesome!

Can someone give me the idea how to get that?

8:29 pm on Sept 26, 2008 (gmt 0)

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Digg has gone a long way.

Downhill.