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.
Kind of surprised this hasn’t gotten more coverage in the Digg-obsessed blogosphere (other than this and this): Katie Couric, the not-so-critically acclaimed CBS News anchor, has uploaded a video to YouTube in which she asks the Digg community for questions they want her to ask when she’s at the upcoming political conventions. Flashing her Digg T-shirt, Couric comes across (at least to me) as playing along with something she doesn’t really feel committed to — likely true, since I doubt it was her idea — but at the same time cheerfully willing to take a flyer on the idea. Plus, I have to say she looks kind of cute in that Digg T-shirt. But the last laugh could be on me: the video, which got a bump from Digg founder Kevin Rose, has over 3,000 Diggs already, and many of the questions (in fact, most of them) are about serious political issues.
Maybe it’s just the summer heat getting to people, but TechCrunch swears that this time it’s for real, and Google is on the verge of buying Digg for “around $200-million.” Yes, this is pretty much the same rumour that was going around earlier this year, but Mike Arrington says the talks are back on (apparently Marissa Meyer lost interest in the company for awhile). But does it make any sense for Google to do such a thing? Eric Eldon wonders why the Web giant wouldn’t just build its own Digg, just like Yahoo did with Buzz and AOL did (with somewhat less success) at Netscape, which was later relaunched as Propeller.
I think this rumour has some legs, not because I have any kind of inside contacts at Google, but because I think a combination of Digg and Google News would make for a pretty attractive property in a lot of ways. It didn’t seem like a great fit when Digg was mostly just tech-focused, but as the service has broadened its appeal I think it has come closer to something Google would be interested in, although how much Digg has really expanded its readership is open to debate. The Internet behemoth has an obvious interest in the social side of content delivery (when you think about it, PageRank is a form of crowd-sourcing) and it might juice things up a bit at Google News — or even the search side, where the company is apparently testing user input on search results.
It goes without saying that even if the two are talking about a deal, it could go off the rails at any point over issues like price, control, etc. But all in all I think that a combination makes some sense. If nothing else, I’d like to see what would happen if Google combined Digg with Google News or turned the Digg algorithm loose on search.
So Mixx — a Digg-like social news app — has been bragging to anyone who will listen that its traffic has doubled to a million uniques a month in May, and it is getting lots of love from its mainstream-media partners, including USA Today, Los Angeles Times, the New York Times, Reuters and Slate. But is a million uniques good or bad? That depends on who you ask (or whom, if you’re going to get all grammatical on me). Marshall Kirkpatrick at Read/Write Web isn’t impressed, since that’s a lot less than the 26 million uniques that Digg gets every month. Erick Schonfeld at TechCrunch seems a little more impressed, and Nick O’Neill over at the Social Times blog says that it’s nothing to sneeze at.
Nick has a point when he says that 200-per-cent growth in a single month is pretty impressive, although it’s worth noting that such growth rates aren’t unheard of when a site is coming from a small base. My ability to bench-press 350 pounds increased by 200 per cent last month as well, but that’s because I was able to do three of them instead of just one. Marshall’s point seems to be that Mixx should be seeing even more growth given some of the top-tier names that are adding Mixx links to their news stories. As the Washington Post notes, many of those connections come from Mixx founder Chris McGill’s former ties to Yahoo and USA Today (McGill has responded to Marshall’s post).
Drew Curtis, the founder of Fark, makes an interesting point in the Washington Post story: he says he doesn’t think social-news services such as Digg and Mixx are a great fit with mainstream media sites. “Most people don’t bother with them because they’re either lazy or they just don’t care,” he says. A little harsh, but pretty close to the truth, I would argue. Mixx may have no trouble attracting social-news junkies — although I find it cluttered and don’t see much in the way of community there (something Tony Hung mentions as well) — but will many of those come from the links at CNN or USA Today? I’m not so sure.
As I think many people probably expected, the Digg takeover rumours have turned out to be totally untrue — or have they? According to Jay Adelson at least, they are completely false. The Digg co-founder says the company is “focused on improving Digg and rolling out great features,” which is pretty much the same thing he said when he was asked the question during Digg’s recent “town hall” Q & A session. But Mike Arrington isn’t backing down — he says his source on the story is very good and he sticks by his report that Digg is talking to either Google or Microsoft or both.
Could Jay be telling the truth and yet still working on a sale of Digg? Sure he could. As Peter Kafka notes at Silicon Alley Insider, the Digg denial didn’t say that the company wasn’t for sale, and it didn’t deny that Google and/or Microsoft were talking to the company — it just said that reports of a bidding war between the two were false. Companies do this all the time: deny that anything is happening, in as vague a way as possible, right up until the thing actually happens. Steve Jobs is a master of this. Remember “People will never watch video on a handheld device?”
So at least for now, the Digg takeover rumours are just as alive as they were before, despite Jay’s denial. Would Google or Microsoft make a better buyer? I’m not sure. It would be interesting to see what Google would do with it — would they integrate it somehow with Google Reader maybe? — but to me that seems like a stretch. I think Microsoft needs the help more when it comes to getting social networks and recommendation engines and so on. And maybe Kevin will one day actually be worth the $60-million that BusinessWeek said he was worth way back when.