Comments on: The True Value of Digg http://www.wisdump.com/web/the-true-value-of-digg/#utm_source=rss&utm_medium=rss&utm_campaign=the-true-value-of-digg Dumping wisdom on the masses Tue, 16 Mar 2010 17:19:41 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Adam Thody http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5701 Adam Thody Thu, 21 Sep 2006 14:13:50 +0000 http://wisdump.com/?p=244#comment-5701 Scrivs, it's apples and oranges. What a completely different site sold for, under completely different circumstances, over a year and a half ago bears no relevance. Revenue is one metric. Amazon.com barely turned a profit for many years, then in the course of one year their net went up 16 fold. You can not value a company based solely on revenue, and if their revenue isn't great then VCs must be seeing the value elsewhere. ...Why would Digg buy themselves? We've been talking about VCs the whole time, they're the ones valuing the site, they're the ones with the money. Please, you know what I meant, and in this case the company is a site essentially (the infrastructure behind Digg is likely very minimal). My underlying point is not that Digg is worth $200MM, but that none of us have the information or expertise to say the site is worth this, or isn't worth that so we should go no like we're experts on the subject. Scrivs, it’s apples and oranges. What a completely different site sold for, under completely different circumstances, over a year and a half ago bears no relevance.

Revenue is one metric. Amazon.com barely turned a profit for many years, then in the course of one year their net went up 16 fold. You can not value a company based solely on revenue, and if their revenue isn’t great then VCs must be seeing the value elsewhere.

…Why would Digg buy themselves? We’ve been talking about VCs the whole time, they’re the ones valuing the site, they’re the ones with the money.

Please, you know what I meant, and in this case the company is a site essentially (the infrastructure behind Digg is likely very minimal).

My underlying point is not that Digg is worth $200MM, but that none of us have the information or expertise to say the site is worth this, or isn’t worth that so we should go no like we’re experts on the subject.

]]> By: Irene Brawn http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5700 Irene Brawn Wed, 20 Sep 2006 15:34:57 +0000 http://wisdump.com/?p=244#comment-5700 I can surely declare that I like Digg. It's great website and people enjoy the work they create. I think there is one little "secret" which allows Digg to be the best one. Visitors take part in the Digg’s function and they believe that they have a real choice. I can surely declare that I like Digg. It’s great website and people enjoy the work they create. I think there is one little “secret” which allows Digg to be the best one. Visitors take part in the Digg’s function and they believe that they have a real choice.

]]> By: web hosting company http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5699 web hosting company Wed, 20 Sep 2006 09:40:57 +0000 http://wisdump.com/?p=244#comment-5699 Well, the evaluation of a webistes truly depend upon the amount of traffic that particular website is recieving. Well, the evaluation of a webistes truly depend upon the amount of traffic that particular website is recieving.

]]> By: Scrivs http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5698 Scrivs Tue, 19 Sep 2006 23:12:26 +0000 http://wisdump.com/?p=244#comment-5698 Adam: Wow, how many times can you be wrong in one comment? First Flickr was bought by Yahoo and from what I remember the number was less than $30MM so obviously it was valued at something. It was mentioned that the revenue (not profit) of Digg was $3MM. How you can extrapolate that to $200MM is beyond me. Finally, who has $200MM to spend? Certainly not Digg. Finally, finally, VCs don't "buy sites for a living", they invest in companies. Adam: Wow, how many times can you be wrong in one comment? First Flickr was bought by Yahoo and from what I remember the number was less than $30MM so obviously it was valued at something.

It was mentioned that the revenue (not profit) of Digg was $3MM. How you can extrapolate that to $200MM is beyond me.

Finally, who has $200MM to spend? Certainly not Digg.

Finally, finally, VCs don’t “buy sites for a living”, they invest in companies.

]]> By: Adam Thody http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5697 Adam Thody Tue, 19 Sep 2006 17:17:22 +0000 http://wisdump.com/?p=244#comment-5697 The value is that millions of people make millions and millions of visits. The nature of the site is that you click on a link and leave the site...but you end up coming back. My guess is that although the length per visit may not be long the volume of visits compensates. I see these "I'd never pay this much for that" posts regarding web sites all the time, and frankly I find them a little ridiculous. VC's buy sites for a living. It's what they do. If they make a decision you don't understand they most likely have information you don't or a depth of experience you don't. They make decisions based on metrics that aren't at the public's disposal, not idle speculation (like this post). Then you go on to say that Flickr is more deserving of the valuation. Has Flickr been even been evaluated? My guess is that it would be valued much higher than Digg...not sure how comparing the two sites adds any value to your argument. If you're still not convinced, the fact that they've got $200MM to spend should be a pretty good indication that they know what they're doing, and they've been successful at it. The value is that millions of people make millions and millions of visits. The nature of the site is that you click on a link and leave the site…but you end up coming back. My guess is that although the length per visit may not be long the volume of visits compensates.

I see these “I’d never pay this much for that” posts regarding web sites all the time, and frankly I find them a little ridiculous. VC’s buy sites for a living. It’s what they do. If they make a decision you don’t understand they most likely have information you don’t or a depth of experience you don’t. They make decisions based on metrics that aren’t at the public’s disposal, not idle speculation (like this post).

Then you go on to say that Flickr is more deserving of the valuation. Has Flickr been even been evaluated? My guess is that it would be valued much higher than Digg…not sure how comparing the two sites adds any value to your argument.

If you’re still not convinced, the fact that they’ve got $200MM to spend should be a pretty good indication that they know what they’re doing, and they’ve been successful at it.

]]> By: Michael Mahemoff http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5696 Michael Mahemoff Tue, 19 Sep 2006 07:27:26 +0000 http://wisdump.com/?p=244#comment-5696 If and when Digg becomes more personalized (ie Reddit), it will have a good opportunity to cash in on advertising. The visualization tools coming out of "Digg Labs" show that the Digg team will be interested in creating a more personal UI that's not just a long list of links. If and when Digg becomes more personalized (ie Reddit), it will have a good opportunity to cash in on advertising. The visualization tools coming out of “Digg Labs” show that the Digg team will be interested in creating a more personal UI that’s not just a long list of links.

]]> By: Kyle Korleski http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5695 Kyle Korleski Mon, 18 Sep 2006 21:57:57 +0000 http://wisdump.com/?p=244#comment-5695 I'll give you the exact value of Digg in my eyes. $0.00 I’ll give you the exact value of Digg in my eyes. $0.00

]]> By: Scrivs http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5694 Scrivs Mon, 18 Sep 2006 14:59:03 +0000 http://wisdump.com/?p=244#comment-5694 Alex: That isn't my summary of the web at all. Yahoo keeps people on its site as does Myspace. I could continue on with the list so to think the web is all about bouncing from site-to-site would be a great fallacy in my mind. John: You're welcome. Alex: That isn’t my summary of the web at all. Yahoo keeps people on its site as does Myspace. I could continue on with the list so to think the web is all about bouncing from site-to-site would be a great fallacy in my mind.

John: You’re welcome.

]]> By: Scrivs http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5693 Scrivs Mon, 18 Sep 2006 14:46:30 +0000 http://wisdump.com/?p=244#comment-5693 Colin: I think Digg already has something like this in place for its topp contributors where there submissions have a higher chance of reaching the homepage. However, the top submitters are usually casual readers and not people who point to their own sites so the benefits gained by them aren't very much. soxiam: Agreed, I know the value of having a large site (trust me), but valuing it at $200MM simply based on advertising for a site that pushes users away still doesn't make much sense. Myspace can reach a $500MM valuation simply because it keeps its users active on the site and there are other methods to monetization besides advertising along with the power that Fox gets by advertising its own line of products, movies and shows on the site. Colin: I think Digg already has something like this in place for its topp contributors where there submissions have a higher chance of reaching the homepage. However, the top submitters are usually casual readers and not people who point to their own sites so the benefits gained by them aren’t very much.

soxiam: Agreed, I know the value of having a large site (trust me), but valuing it at $200MM simply based on advertising for a site that pushes users away still doesn’t make much sense. Myspace can reach a $500MM valuation simply because it keeps its users active on the site and there are other methods to monetization besides advertising along with the power that Fox gets by advertising its own line of products, movies and shows on the site.

]]> By: soxiam http://www.wisdump.com/web/the-true-value-of-digg/comment-page-1/#comment-5692 soxiam Mon, 18 Sep 2006 13:12:49 +0000 http://wisdump.com/?p=244#comment-5692 I think you almost answered your own question in the last sentence. Digg is large. And to VC's evaluating the company as an acquisition target this usually translates to advertising dollars. It's a shallow-portal model with relatively hit-n-run traffic, but this could be a benefit in some cases. Any truly community driven sites require a lot of resources, caring, and feedback-driven enhancements in order to sustain growth. It creates more value but also costs more to operate. I think you almost answered your own question in the last sentence. Digg is large. And to VC’s evaluating the company as an acquisition target this usually translates to advertising dollars. It’s a shallow-portal model with relatively hit-n-run traffic, but this could be a benefit in some cases. Any truly community driven sites require a lot of resources, caring, and feedback-driven enhancements in order to sustain growth. It creates more value but also costs more to operate.

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