YouTube Sold, Is Digg Next?

Now that Google has snapped up YouTube for $1.65 billion, one has to wonder how long before they set their eyes on Digg. Digg is a very good target for Google, or any other big media company, to acquire.

Digg is one of the Internet’s biggest success stories. Started by Kevin Rose with just $1,000, Digg has grown to become one of the biggest news sites on the Internet. With over 400,000 members and over 200 million page views per month, Digg has a readership that is nearly as big as the New York Times.

Google would make a perfect buyer for Digg. No doubt, they will get into a bidding war with Yahoo over it, but this will benefit the Digg owners. If AOL hadn’t created their own Digg clone, they would most likely be in the running as well.

A buyout by Google or Yahoo would give Digg access to many resources they would need to improve the site and to keep Netscape at bay. Netscape has been gaining ground on Digg ever since they offered $1000 a month income to the top 50 Digg users to switch over. Digg is in no position to compensate their users but with a big parent like Google, they would have a lot more options open to them.

Digg is a private company that accepted VC money. Venture capitalists don’t stay with a company forever. They cash out by taking the company public or by selling it. With the current wave of high dollar acquisitions, Digg and their investors has to be looking at the site and seeing huge dollar signs.

While Digg will never publicly state that they are for sale, I got even money that says they are open to offers. Back in January there was a rumor that Yahoo offer $40 million for Digg. According to this Business article, Digg is worth at least $200 million, even though they are only breaking even right now. Is a company with just $3 million a year income worth $200 million? I doubt it, but we are in the middle of Dot Com Bubble 2.0, where pricing a website makes absolutely no sense. With these kinds of crazy valuations, the question isn’t whether Digg is for sale, the question is when Digg will be sold.


12 thoughts on “YouTube Sold, Is Digg Next?”

  1. Charl Norman says:

    very good article.. Google has 10 bil cahs on hand.. they need to spend it on something

    It will be insane if they goble up Digg aswell

  2. David Knell says:

    Even money that Digg are open to offers? Any VC-funded firm is *always* open to offers – it’s just the size of the required offer that’s a function of time.

    Not sure about your statement that Digg can’t afford to pay people to dig, if that’s the right way to put it. If I could invest $50k/month on 50 people to support a sale of my business at a $200M valuation, I’d get the chequebook out now.

    –Dave

  3. Pierre says:

    John.. I remember your blog when you used to write interesting articles, not trying to make the Digg frontpage. I mean, anyone can figure that Digg will be sold someday and your readers know that you don’t have any leads from Digg or Google about the sale let alone the negociations.

    I enjoyed your articles about web site monetization but now with all those “I’m a Digg Whore” articles I really start to wonder if you make good money with TTZ. I mean, why wasting your time trying to get some Digg front page stories for 200$ a month from AdSense if you could put this time on TTZ for even more revenue.

  4. Abe Olandres says:

    Digg will loose it’s “democratic nature” stamp if it is bought by some big company. So I guess not.

  5. John Chow says:

    Pierre – TTZ runs itself. I don’t have to put time into it. And it gets its own share of Diggs too. As for spending a lot of time on my blog, well it’s my passion right now and I can afford to spend time on things that don’t make money.

    I don’t consider getting these Diggs to the blog a waste of my time. You are right that it’s not financially rewarding but it’s not about making money. It doesn’t matter how good a blog is if nobody read it. The Diggs have helped to increase that readership tremendously. I could have continued to slowly build up the readership from its 1200 page view per day Pre-Digg time, but thanks to Stephen, I found a cool way to accelerate that.

  6. Mubin says:

    Hiya John!

    Love your blog man, what I wanted to ask was how do you get the “Heres a few more related posts” to show up?

    Is it manual? Or is there an ever so elusive plugin available same goes for your adsense could you let me know where you pasted the code for that? I am using the MIsty Look theme which is the same as what I believe you are using could you please let me know by email or through your comments some tips?

    The site is blog.feeree.com wont post a live link!

  7. Pierre says:

    I’m glad to see that you’re being honest about your new blog orientation. Still, don’t forget your long-time readers and please write more articles about your website ventures and some of your restaurant reviews =)

  8. Carl says:

    This one was a bit too obvious.

  9. Ryan says:

    I’d like to know more about the world of John Chow more than what google wants to buy next.

    But I keep hearing that Google wants Facebook right now.

  10. John Chow says:

    Mubin – The related post plugin is by Mr. Wasabi. I wrote about the plugin here.

    The AdSense plugin is by AdSense Deluxe. I wrote about that one here.

  11. Silas says:

    Hey guys,
    I have an iMac G5 running tiger 10.4.7 and I an having a wierd problem. Whenever I go to a site that has an embedded youtube, flash or some kind of video, there is no sound. If it a quicktime file there is no problem. There is not sound no matter what broswer I use, firefox, camino, safari, or shiira. And keep in mind that about a week ago I was not having this issue.

    Help Would be awesome
    Thanks!

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