Kevin Rose gave a interview today…
Are you concerned that if economic conditions get tougher and the ad market tightens up, that you’ll feel forced to sell?
Rose: Digg has 25 million people a month coming to the Web site. We’re not going anywhere. We have very strong financials, we have a very clear path to profitability, we have a small team. We’re 50 employees.
What about hardware and R&D costs?
Rose: Digg’s very lightweight. We don’t serve, you know, YouTube videos. So for us it’s not like we have some crazy bandwidth bill at the end of the month. I mean, it’s crazy, but it’s not YouTube crazy.
Ok so digg has 300-500M pageviews a month, probably 20k/month in hardware/bandwidth servers etc, no real work for their 50 employees to do, “25 million” users coming to the site a month they can’t make any money yet somehow. 50 employees * $7000 salary/month = $350,000/month + 70k random expenses gets you at 420k/month in expenses. That means diggs revenue is far below that… How on earth do they expect to sell themselves for $300 Million ? The site is nothing more then a collection of links to news stories that are indexed by google and thereby get a massive amount of referrals from google.
Yahoo Finance Google finance etc all their postings in the forums are nothing more than short twitter messages. I don’t see why twitter doesn’t enter this space and own it. The CPM’s are among the highest paying on the internet and users would use the system religiously because it would provide utility. I think this is where the real money is and if twitter doesn’t own this space someone else will, and earn 10’s of millions a year because of it.