Digg gets bags of cash, but for what?

by Mathew on September 24, 2008 · 6 comments

So Digg has raised an additional $28.7-million from its various financial backers, according to a blog post by co-founder Jay Adelson, a press release from the company, and numerous reports from the blogosphere. That’s almost three times as much as Digg has raised so far, in two previous rounds of financing. Why so much? That’s not really clear. Jay says the company wants to focus on growing internationally — but is it really going to cost that much to translate Digg into Spanish or French or Kazakh or whatever? (Erick Schonfeld at TechCrunch says that Digg wants to focus on growing internationally because its traffic in the U.S. is flattening out).

The other thing Kevin mentions, along with “new features,” is infrastructure. I have no doubt that Digg pushes a lot of bandwidth, and no doubt uses a few boatloads of server space as well — but almost $30-million? Does it cost that much just to develop some analytics for partners like the New York Times? Of course, Digg also says it’s going to hire another 75 people and move into a new office, which will definitely crank up the old “burn rate” a little bit, as Valleywag notes. Om says he has it on good authority that Kevin Rose pocketed some of that money by selling some shares, and I’d agree with Om that if he did then he should be congratulated for taking the opportunity to make that old BusinessWeek cover a little more true.

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