BusinessWeek got ahold of social news site Digg’s financials.
For a site that gets as much traffic as Digg.com does — 22.6 million monthly uniques, according to Quantcast — the numbers are gruesome:
- Last year the company lost $2.8 million on $4.8 million of revenue
- In the first three quarters of 2008, Digg lost $4 million on $6.4 million of revenue.
- Digg wanted to sell for $300 million last year, but took funding this fall to set its valuation at $167 million
A few thoughts:
- To some extent, this is an indictment of Microsoft, which sells ads for Digg. Why is there an ad for Hollister in Digg’s auto section and not an ad from a carmaker?
- Gawker Media, which has very similar traffic to Digg, also breaks its traffic into ad-friendly categories and it does “rather better in revenue,” owner Nick Denton told us after looking at Digg’s numbers. Here’s one reason why: Gawker lets advertisers run huge ads and re-skin its sites. Digg forces its advertisers into tiny little boxes and banners.
- Digg’s costs are running at $14 million or so a year. Why is that number so high? The site has no editorial.
After the company raised money this fall, CEO Jay Adelson said the new priority will be revenue. That makes sense. And given Digg’s astounding traffic and popularity, there ought to be a way to make it work as a business.