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Don’t get me wrong, I think Digg is a very worthy website…but I know, as everyone knows, that Digg is run by hyped up incompetent businesspeople Kevin Rose & Jay Adelson…even though it’s not a penny stock, it’s my duty/obsession to cut through the misinformation/BS and present the facts…check out their latest propaganda video on their 5 year anniversary:
Now I had no idea I was gonna write this article until 1:20 into this video where future incompetent penny stock CEO Kevin Rose says “I was hoping it would eventually grow to become popular enough to where I could pay my rent”
That statement is ironic because despite 37.3 million monthly visitors, Digg loses millions upon millions per year and as of December 2008 when the world got a look at their hideous financials, they have ALWAYS lost millions upon millions of dollars…just like the typical pumped up penny stocks which focus on selling the dream instead of the grim reality. (which is what gave this blog posts its title, Kevin Rose & Jay Adelson are nothing more than startup promoters)
Like TheStreetSweeper.org with pump & dumps like AENY & JYHW, I’m not the only one to realize Digg is a pump & dump, check out what TechCrunch said when everyone got a hold of Digg’s laughable financials:
So Business Week gets their hands on Digg’s financials and reports that the company had 2007 revenues of $4.8 million and losses of $2.8 million. The first three quarters of 2008 Digg had revenues of $6.4 million and losses of $4 million. That implies total 2008 revenue of $8.5 million, with $5.3 million in losses.
First of all, ouch. People close to Digg once suggested to me that the Microsoft search deal, which was announced in July 2007, would bring in well over $100 million in revenue to Digg over the three year agreement (something we’ve never reported). That suggestion seems to be completely false. The deal is bringing in less than $10 million/year.
Second, Digg shouldn’t be losing money. They have over 70 employees, the company recently confirmed, and plan to grow to 150 by the end of next year. That’s an awful lot of people for a company that outsources sales and content creation, and has little to do besides focus on keeping the servers humming.
Per the video the virus that is the Digg wannabe company is up to 85 employees…the management would like you to believe it’s a giant success and in today’s early/naive web world, they might be right–if sold (they’ve been trying but unsuccessful for years), they’ll probly bring in $50+ million to any giant media company which they can sucker, pushing the lie that they are reinventing how people discover news, blah blah blah (successful inventions are profitable duh)
…but in the real world of building actual sustainable businesses, Kevin Rose & Jay Adelson have failed miserably…and they should not be celebrated…or put on the cover of Businessweek…they should be looked down upon for their incompetence and wastefulness (what I would do with 1 million, let alone 37 million unique monthly visitors…wow, what an incredible waste), in the same way their investors who have now poured $40+ million into this money losing venture look down upon them and likely wish they never got suckered into this media and goon-led management team hyped pump and dump.
Disclosure: I am not short Digg because they are not a stock. If they were a stock, I would short them just like any other failing carcass company…and I’d short big because this carcass has managed to pull the wool over the eyes so many allegedly smart people.