If digg is worth 200 million then i’m a billionaire.

This latest story on digg is laughable.   The founder of digg owns 30% of the company,  and is estimated to break even with 3 million a year in revenues.  Business week uses alexa data to measure how popular the site is,  says the company is worth 200 million + because that is what someone in the know says.   Numerous other people are ridiculing the article as well.

11 Responses to “If digg is worth 200 million then i’m a billionaire.”

  1. Mitch Bartlett Says:

    It’s time for another rush back to the Internet for gold. We went through the dot-com boom in the late 90’s, then real estate was king afterwards. Now that that is dead, it’s time again for overvalued companies to make the headlines on the backs of buzzwords like “web 2.0” and “blog”.

  2. Jonh Says:

    Here’s another article debunking this nonsense:

    Sorry, Markus — I guess you’re not a billionaire yet🙂

  3. Josh Says:


    I think you need to take a step back and swallow a bit of your arrogance. Whilst I enjoy following your blog, lately you seem to rate everyone else accordingly to how good you are. I think you need to take a step back and release you would be admired for respecting others rather than constantly putting them down.

  4. John Says:

    Markus didn’t put down the achievements of digg’s founders — all he did was note how absurd the BW article about digg is. Arrogance is bad but you can’t accuse Markus for having it.

  5. Markus Says:

    I fail to see how this post has anything to do with the accomplishments of people at digg. This is a story about business week writing a clearly fraudulent story in an attempt to sell more magazines.

    I see little difference between stock analysts writing fake research reports hyping Internet stocks in the 90’s causing people to lose millions investing in junk and these “reporters” writing articles pumping a web company on completely bogus numbers. Both deserve jail time for misleading people for personal/corperate gain.

  6. Josh Says:

    I totally agree with your followup comments.

  7. michael webster Says:

    1. Businessweek writes a story with a headline that their own story shows is false.

    2. People jump all over the false headline. Some even pointing out that the acutal story is far more ambivalent about the possible outcome: boom or bust.

    3. What is the outcome of this false story? Because so many called the $200 million bs, it will become an anchor from which people will discount the “true” value – instead of coming up with their own realistic revenue model.

  8. Joseph Says:

    Digg is most likely worth about $18 to $24 million with just $3 mil a year in revenues.

    The most common valuation formula I have seen these days is taking 20-40% of annual revenues as an approximation for cash flow margin and putting a 20, or high teen multiple (which is around what Google and other newly public internet companies currently trade for as a multiple on cash flow margin) on that. This would value Digg at $10 million on the low end to $24 million on the high side.

  9. John Webster Says:

    Did MySpace go cheap then? I don’t know why some of these companies don’t sell their sites when the hype is there…FaceBook or some of these other social network sites for instance. I’m sure Friendster wish they would have.

    Markus, have you had offers from companies, say big dating sites, to buy your site? Goes against their model though…

  10. RJB Says:

    Why is this article getting so much attention? Maybe I am too young to know a world when journalism was based on facts.

    John Webster – Remember PointCast? But… Remember PayPal?

    If you built something you truly believe in you really want to see where you can take it.

  11. unitstep.net Says:

    How “web 2.0″ is actually changing things

    With all the talk about how Digg, the community social news site, is supposedly worth $200 million, and the ensuing cries of BS, you’d think we were well on the way to Bubble 2.0 instead of web 2.0. Semantics of the “web 2.0″ term as…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: