Tag Archives: Allen & Company

Are Digg’s users the real reason nobody buys them?

While reading over our daily dose of web 2.0 news and stories across our favorite technology blogs, we came across a very interesting theory being discussed on a few of these blogs.

Based on what we have read, and understood, it might turn out that Digg has a track record of surrendering to the mob when things get really bad. Giving control of its users to what shows up on their home page as a story or news is perhaps what made Digg popular but ironically it plays, with the same degree, a very negative role in Digg’s attempt to sell itself out. While the rumors are spreading around Web that potential buyer of Digg might be Microsoft (although they decline that) angry digg users are taking on the site with the promise they never return to it if the Redmond’s giant gets its hands on the popular user generated news site. We have speculated a lot over the past months as to what might be the reason why such a mainstream-like popular site does not get its long-waited exit despite all of its attempts it seems what is attracting potential suitors to Digg (its massive number of users) is what might be scaring them away.

Here is an extraction, as found on Techrunch, of the comments on Digg’s page under the news that Microsoft might be the potential buyer of Digg. 

  • Don’t sell Digg Kevin! Digg this story he needs to know how we feel!
  • Why not sell digg when you don’t care about the community. Sell it and we will be happy.
  • Somehow i think if Microsoft manages to buy digg a larger revolt than 09 F9 11… will happen, at least i know what i will do
  • I would have to see how things went afterward. If Google tried to shoehorn their “style” in to Digg’s interfaces (see: Jotspot), or if Microsoft tried to turn it in to a Windows program, I would switch to Reddit. I like Digg more, but either of those scenarios would kill Digg for me.
  • If MS is in, I’m out.
  • OK guys, Kevin doesn’t give half a shit about you. He cares about what all americans care about: $500,000,000 in his pocket. Good old capitalism, eh?
  • Goodbye Digg… Its been good knowing you… too bad you were gobbled up by corporate america. I remember back in the day when you were a bastion of free speech and unfettered entertainment, but no longer. I guess I will have to revert back to the “best of” section of Craigslist. Don’t sell your soul.
  • As long as they lets us delete our accounts
  • I am new to digg.com and I really like it. If Microsoft were to buy it that would be it for me. I will remove it from my favorites and never come back.
  • Dude. If Microsoft gets its fucking hands on this site then you will definitely have one less viewer. Those fuckers taint everything they touch.
  • Is this for real come on Kevin don’t give up to digg to these huge companies. What makes digg so special and fun is that it’s independent this is not a good idea.
  • If Microsoft purchases this site, go ahead and make your last act to institute a ‘delete your account’ function.
    This is terrible news. Lets see if we can have yet another viable outlet bought up by huge conglomerates which try to feed us what we are allowed to think and censor our beliefs. I tell you what. If digg is sold, I’m not coming here anymore! Kevin please don’t let this happen. Tell us this is about more than money.

Digg’s saga continues.

More

http://blog.digg.com/?p=114
http://digg.com/tech_news/Google_Microsoft_Bidding_For_Digg
http://digg.com/
http://www.techcrunch.com/2008/03/09/digg-users-are-doing-their-best-to-kill-an-acquisition/
http://www.techcrunch.com/2007/05/01/digg-surrenders-to-mob/
http://www.techcrunch.com/2008/03/07/google-microsoft-bidding-for-digg/
https://web2innovations.com/money/2007/12/19/digg-guys-are-up-for-sale-again-quietly/
http://www.quantcast.com/digg.com
http://www.techcrunch.com/2007/12/17/for-sale-used-social-voting-site-asking-price-300-million-goes-by-the-name-of-digg/
http://www.hoovers.com/allen-&-company/–ID__51026–/free-co-factsheet.xhtml
http://www.techcrunch.com/2006/12/28/no-acquisition-for-digg-raise-series-b-round-instead/
http://www.techcrunch.com/2007/11/07/just-sell-digg-already-jay/
http://nextnetnews.blogspot.com/2006/12/why-nobody-buys-diggcom.html
http://venturebeat.com/2007/12/17/source-digg-hires-bank-hoping-to-sell-for-300-million-or-more/
http://nextnetnews.blogspot.com/2007/02/diggcom-fights-spam-scam-games.html
http://www.pronetadvertising.com/articles/latest-digg-payola-exposed.html
http://valleywag.com/tech/rumormonger/digg-close-to-a-300-million-sale-320145.php
http://valleywag.com/tech/sun-valley/whos-selling-whos-buying-at-the-allen-confab-276716.php
http://money.cnn.com/magazines/fortune/fortune_archive/2004/06/28/374371/index.htm

Digg is likely to make a nice exit soon

Digg, the user generated news site, has been pretty serious on getting itself sold for quite long time now. Just late last year they have hired Allen & Company to shop the site for what rumors claim to be anything in the $300 million range. There were literally millions of speculations around the blogosphere why Digg cannot sell so far, some of them summarized can be read over here.

Today we are reading they are about to finally make their long waited exit. Rumored bidders are, of course, Google and Microsoft, among a couple of media type of companies, no names quoted. This time however the price is being said to be way below the price tag of $300M Digg has put on its site last year – in the $200-$225 million range.

According to Quantcast, which we believe is very accurate, Digg.com is hugely popular site and is already reaching more than 25 million unique visitors per month. Just like a couple of months ago, here we again think Digg does worth more than $300M at the very current moment, with or without steady revenues, simply because of its popularity, leadership, reach and target audience. 25 Million unique visitors per month is almost a mainstream site and we have seen sites with less that traffic getting acquired in the 10 digit range.

Taking into consideration the fact that in case Microsoft does not buy the site they are likely to terminate the ad agreement they have with Digg, it seems that other bidders are not including the Microsoft revenues in Digg’s valuation.

More about Allen & Company

Investment bank Allen & Company has been involved in a number of high profile mergers and acquisitions in the past. Interesting for the Allen & Company is the privacy the investment firm seems to be working in as argument for which is the absence of even a basic site for the company on Web. Perhaps they don’t like publicity. Yet, we have found the firm’s contact details, which can be found among the other links on the end of the story’s page.

For Allen & Company, there’s no business like financing show business. The investment bank serves variously as investor, underwriter, and broker to some of the biggest names in entertainment, technology, and information. Viewed as something of a secret society, the firm has had a quiet hand in such hookups as Seagram (now part of Vivendi) and Universal Studios, Hasbro and Galoob Toys, and Disney and Capital Cities/ABC. The firm’s famous annual retreat in Sun Valley, Idaho, attracts more moguls than a double-black ski run (Warren Buffet, Bill Gates, and eBay CEO Meg Whitman have attended). Brothers Herbert and Charles Allen founded the company in 1922.

Key people and executives for Allen & Company LLC are as follows:

  • Non-Executive Chairman Donald R. (Don) Keough
  • President, CEO, and Director Herbert A. (Herb) Allen
  • Managing Director and CFO Kim M. Wieland

More

http://digg.com/
http://www.techcrunch.com/2008/03/07/google-microsoft-bidding-for-digg/
https://web2innovations.com/money/2007/12/19/digg-guys-are-up-for-sale-again-quietly/
http://www.quantcast.com/digg.com
http://www.techcrunch.com/2007/12/17/for-sale-used-social-voting-site-asking-price-300-million-goes-by-the-name-of-digg/
http://www.hoovers.com/allen-&-company/–ID__51026–/free-co-factsheet.xhtml
http://www.techcrunch.com/2006/12/28/no-acquisition-for-digg-raise-series-b-round-instead/
http://www.techcrunch.com/2007/11/07/just-sell-digg-already-jay/
http://nextnetnews.blogspot.com/2006/12/why-nobody-buys-diggcom.html
http://venturebeat.com/2007/12/17/source-digg-hires-bank-hoping-to-sell-for-300-million-or-more/
http://nextnetnews.blogspot.com/2007/02/diggcom-fights-spam-scam-games.html
http://www.pronetadvertising.com/articles/latest-digg-payola-exposed.html
http://valleywag.com/tech/rumormonger/digg-close-to-a-300-million-sale-320145.php
http://valleywag.com/tech/sun-valley/whos-selling-whos-buying-at-the-allen-confab-276716.php
http://money.cnn.com/magazines/fortune/fortune_archive/2004/06/28/374371/index.htm

Digg guys are up for sale again, quietly

The situation around Digg is heating up, but not because there are many potential buyers bidding for the company, but it seems the rumors are all around us telling stories where Digg is in desperation to sell out. It has happened before; it happens today again, the only difference is the price tag. Digg is again getting serious about a sale and has hired Allen & Company to shop the site for what rumors claim to be anything in the $300 million range.

Investment bank Allen & Company has been involved in a number of high profile mergers and acquisitions in the past. Interesting for the Allen & Company is the privacy the investment firm seems to be working in as argument for which is the absence of even a basic site for the company on Web. Perhaps they don’t like publicity. Yet, we have found the firm’s contact details, which can be found among the other links on the end of the story’s page.

For Allen & Company, there’s no business like financing show business. The investment bank serves variously as investor, underwriter, and broker to some of the biggest names in entertainment, technology, and information. Viewed as something of a secret society, the firm has had a quiet hand in such hookups as Seagram (now part of Vivendi) and Universal Studios, Hasbro and Galoob Toys, and Disney and Capital Cities/ABC. The firm’s famous annual retreat in Sun Valley, Idaho, attracts more moguls than a double-black ski run (Warren Buffet, Bill Gates, and eBay CEO Meg Whitman have attended). Brothers Herbert and Charles Allen founded the company in 1922.

Key people and executives for Allen & Company LLC are as follows:

  • Non-Executive Chairman Donald R. (Don) Keough
  • President, CEO, and Director Herbert A. (Herb) Allen
  • Managing Director and CFO Kim M. Wieland

The obvious question is will Digg sell with a $300 million valuation given that it has been on the market (quietly) for months, even year or two, with no serious interest to date?

According to Quantcast, which we believe is very accurate, Digg.com is hugely popular site and is reaching morethan 22 million unique visitors per month.

Here we go again with lots of speculations for one of the top and most popular web 2.0 websites: digg.com. In our understanding there must be something wrong with either Digg, its business/revenue model or the momentum is simply lost, or something else.

Here are our thoughts on why Digg.com did not get sold so far:

  1. Not profitable enough towards their claims of having 22M visitors a month; in other words too many visitors, too much popularity that seem hard to be monetized.
  2. Digg.com is Slashdot.org 2.0., how much did Slashdot.org go for? As far as we remember it was bought for $20M something.
  3. Their technology and concept is not distinctive and definitely not defendable. There are too many followers and competitors, including Netscape.com (now Propeller.com). Digg set the standard but it seems too many old media companies are building up the same technologies within their web properties which will additionally undermine Digg.com’s popularity.
  4. Digg.com was and still is widely criticized for being corrupted in getting manipulatively different news stories promoted to the home page by a handful savvy Digg.com users.
  5. Geeks are not clicking on ads, as what many people say, so the advertising model seems highly unlikely to be the panacea for Digg.com.
  6. In the past Digg.com and News Corp negotiations have failed for one reason or another, which might have negative impact towards other potential acquirers.
  7. Digg is in one way or another under the control of its top users like Dmoz.org and Wikpiedia. What helped those sites grow to such popularity levels is what seems to be their setback. The new owner has to deal with this issue and it is not a small one.
  8. Top Digg users are often requested to help stories get the home page, sometimes in return for cash payments.
  9. Digg has issues with spam, scam and gaming of their system.
  10. When you have a system that works like Digg, of course there will always be people wanting to organize and promote stories that they like or have interest in. You can’t expect people to vote as an individual, they have friends, they have jobs, and they are involved in communities. Digg should have focused into the tech news at first and stay there. Now Digg is becoming mainstream with inaccurate, sensationalist, boring news mostly recompiled by bloggers from other news. As some people say: the front page posts are recycled news of web, nothing new there. Unless you want to see articles about Digg or the newest Free collection of fonts, the stories are crap. The only stories and news that make it to the home page appears to be the ones submitted by the top users.
  11. Digg is a great idea which has grown faster than its creators’ ability to administer it. In a perfect world, they’d be ahead of these sort of problems, rather than playing catch-up trying to fix scenario after it’s proven to be broken. I suppose broken is a bit harsh actually, but the site is definitely being gamed with Rose et al trying their hardest to implement some rules/policies that will keep it together without destroying the essence of what the site is all about.
  12. Being forerunners in this sort of self-run community, they get to sort out all the pain for those similar sites that will follow later and improve on the idea. Slashdot lead the way for a long while in this regard, and Digg.com came along and improved on the model without having to figure out a lot of the issues Slashdot had already been through. Now Digg is leading the way and having to wade through the mire themselves.
  13. We think that Digg is great success, and with the success all the issues come along, but it takes on old media outlets, which puts fire under their feet and unless they figure this out and find their niche, they are under the risk to have their concept and popular site ruined.
  14. Most users are around and gone after few months, short-term loyalty with revolving door.
  15. Mob mentality crowd which creates abusive comment section.

Despite anything said above, Digg.com, in our view, does cost more than $300M at the very current moment, with or without steady revenues, simply because of its popularity, leadership, reach and target audience. 22 Million unique visitors per month is almost a mainstream site and we have seen sites with less that traffic getting acquired in the 10 digit range.

Yet we cannot get rid from the feeling there must be something wrong that the general public is not aware of, which might be the key reason behind the decision of so many suitors so far to have backed off.

More

http://digg.com/
http://www.techcrunch.com/2007/12/17/for-sale-used-social-voting-site-asking-price-300-million-goes-by-the-name-of-digg/
http://www.hoovers.com/allen-&-company/–ID__51026–/free-co-factsheet.xhtml
http://www.techcrunch.com/2006/12/28/no-acquisition-for-digg-raise-series-b-round-instead/
http://www.techcrunch.com/2007/11/07/just-sell-digg-already-jay/
http://nextnetnews.blogspot.com/2006/12/why-nobody-buys-diggcom.html
http://venturebeat.com/2007/12/17/source-digg-hires-bank-hoping-to-sell-for-300-million-or-more/
http://nextnetnews.blogspot.com/2007/02/diggcom-fights-spam-scam-games.html
http://www.quantcast.com/digg.com
http://www.pronetadvertising.com/articles/latest-digg-payola-exposed.html
http://valleywag.com/tech/rumormonger/digg-close-to-a-300-million-sale-320145.php
http://valleywag.com/tech/sun-valley/whos-selling-whos-buying-at-the-allen-confab-276716.php
http://money.cnn.com/magazines/fortune/fortune_archive/2004/06/28/374371/index.htm