Digg's Amazing Business Model, Explained

This story was written by Rafat Ali.
Now this is where you take out your not-really-that-Easy-Button, and starting jumping on it. Do that while you watch this interview of Digg CEO Jay Adelson, as part of Fox Business Network anchor Liz Claman's continuing "3 Days In The Valley" tour. You've heard/read about her interviews with Yahoo and Google's CEOs. Now read one with the real savior of newspaper industry. Seriously.

Excerpts, and video after the jump:
1.5 billion impressions of those Digg buttons across the Web every month and they are growing by 100 million to 200 million a month.

We are targeting profitability this year and we will have plenty of cash in the bank when that happens.



How do you make money? Well, it is a top 50 website, and you make money with ads.

Our demographics are great. Right now, media buyers like our space.

We are getting 10-20 times the price for an ad that a social network will get.

Folks like LATimes, NYTime and WSJ come to us with those questions [the question being how to prevent the valuable newspapers from disappearing], and we work with them to drive traffic to those websites. We send them 80 million visits a month to the websites. We are helping them to understand how to leverage all these social technologies to better monetize these users.

On future of newspapers: I think we are little but early [on calling the death of newspapers], and we will see consolidation. We will see more national brands, and fewer local brands, and over time, winners will move to the top.

Money situation for Digg: Fortunately we were fully funded to be profitable even before we raised the $28 million [back in September last year].

Who would buy Digg: Someone really really large with lots of money. How about that?...The message we gave in Sept was that we're in it to be independent; we are really in it to drive profitability. If you really want to be bought for a high valuation or do an IPO, you have to make money. We have to prove it first.

At least it is trying now. Unlike others.




By Rafat Ali
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