BoomTown » Jay Adelson

Digg to Cut 10 Percent of Employees; Says It Will Try to Be Profitable in 2009 (The Entire Blog Post)

Kara Swisher — Thu, 22 Jan 2009 17:30:40 +0000

Digg, the San Francisco-based news discovery service and one of Silicon Valley’s more prominent start-ups of late, said in its company blog today that it would cut its 75-person workforce.

A company spokeswoman told BoomTown the cut would be about 10 percent, but would not give out a specific number of employees to be let go.

In addition, Digg noted it would be aiming to cut costs and be profitable in 2009. It will also be hiring a direct sales team.

In other words, revenue does matter too, Web 2.0!

Here’s the entire blog post on the layoffs and more, by CEO Jay Adelson:

Brief update on Digg

Hey all,

Wanted to reach out to folks with an update on Digg and our priorities for 2009 as well as address some of the recent speculation about our business.

As we’ve often stated over the past couple of months, given the current economic climate, we’ve made the decision to take a more conservative approach to our expansion plans and aggressively focus on reaching profitability within the year.

This means we’ll be taking proactive measures to manage our costs including a headcount reduction in certain areas that are less core to this year’s objectives while continuing to hire for roles that will help build on our leadership position and get us to profitability faster. This includes hiring a direct sales team, in addition to other targeted hires in 2009.

As part of our aggressive path to profitability within the year, I also wanted to take this opportunity to highlight some of the major priorities for the company:

• Rolling out new features to grow and engage our community
• Building on our advertising infrastructure
• Building on our successful partnership with Microsoft
• Ongoing sponsorship opportunities
• Ongoing publisher and trade partnerships

I’m confident that with commitment and focus on these priorities, Digg will be an even stronger company in 2009 and will continue to create innovative features for our more than 35 million community members. I want to thank you all for your continued support and commitment–helping us achieve our vision of the democratization of media, and revolutionizing the way people consume and discover information online.

Thanks,
Jay

MicroHoo: Some Web 2.0 Advice!

Kara Swisher — Wed, 23 Apr 2008 08:26:38 +0000

Last night, BoomTown loaded the kids into the car–you try finding a sitter on a Tuesday night!–and went early to a pair of dot-com parties being thrown at some trendy spots in San Francisco related to the Web 2.0 Expo taking place this week.

Our quest was to find out what some savvy Web 2.0 types thought would–or should–happen next in the Microsoft (MSFT)-Yahoo (YHOO) takeover battle, following Yahoo’s earnings report yesterday.

Thus, we made the scene–at widgetmaker RockYou’s “Rockin’ Spring Mixer” at Bong Su and news site Digg’s get-together at Mighty–to get some advice on what’s going to happen next.

Frankly, BoomTown is running low on ideas and we got a good range of predictions to bolster our bare cupboard.

So here’s a good mix of interviews on the topic, with folks such as RockYou CEO Lance Tokuda, Broadband Mechanics’ Marc Canter, Digg Founder Kevin Rose (in the very, very dark and noisy club–sorry!–but you can hear him at least), Digg CEO Jay Adelson and others.

And, at the end of the video, using a dinosaur toy as a metaphor, Louie and Alex Swisher, who pretty much have the situation down cold.

Here’s the video:

[ See post to watch video ]

Digg's Jay Adelson Speaks!

Kara Swisher — Tue, 08 Apr 2008 08:09:34 +0000

At some point and sooner than later, if I had to make a bet, Digg will be sold. And, likely as not, the most likely owner for the popular new site is Google.

And it is no real secret in Silicon Valley that the pair have been talking on and off for a while now, as Google (GOOG) mulls where to take Google News and Digg ponders how it can grow and improve its reliability by being linked to the largest and most neutral company it can.

But after all the Sturm und Drang around news of a phony bidding war for Digg between Google and Microsoft (MSFT) with prices hovering around $200 million that broke out a month ago (which BoomTown refuted in a post here), I thought it was long about time I chatted with its CEO Jay Adelson, to talk about the future of Digg and also the state of news online.

While photogenic Digg founder Kevin Rose often gets the focus as the geek-in-charge at the company, Adelson has had as much skin in the game and also has a deep tech background at early Internet networking companies like Netcom and also as a founder of Equinix.

Traveling between his home in New York and Digg’s San Francisco HQ, Adelson has been helming the user-generated news-discovery site, as it has grown to its current 27 million unique monthly visitors and 250 million page views. Adelson says Digg is poised to be profitable this year.

And while it is easy to find problems–pointing to aggressive competitors like Mixx and Yahoo’s (YHOO) BuzzTracker and serious and nagging issues around technological glitches (like yesterday, for example)–Digg still remains one of the most interesting and substantial start-ups to emerge from the Web 2.0 landscape.

Adelson talks about all this, with an interesting perspective on the hothouse that is Silicon Valley and also where things are going in the digital sector.

Here’s the video:

[ See post to watch video ]

Please see this disclosure related to me and Google.

The Dirty Job of Digging for Accurate Information

Kara Swisher — Mon, 10 Mar 2008 08:02:03 +0000

“Completely inaccurate” does not even begin to get to the heart of the problem, but we’ll get to that later.

First, let’s see if we can sort this latest rumor about the acquisition fever wafting around the popular Digg news site, published by TechCrunch last week.

Its take: That Digg has been pitching itself for sale using bankers from Allen & Co. and was poised to receive high-priced bids from archrivals Microsoft (MSFT) and Google (GOOG), and also had interest from two unnamed major media companies (a good guess here would be CBS and News Corp., owner of Dow Jones, which owns this site).

How exciting! How dramatic! How gripping!

And: How untrue!

That’s because once you actually take time to do actual reporting, you find the story is quite a bit less exciting and dramatic and gripping–pretty much nothing more than part of the typical sniffing and circling that goes on constantly in Silicon Valley.

Here’s what my many and varied sources close to all the companies involved told me, related specifically to the TechCrunch report: Digg is not going around hawking itself, but using bankers to handle interest it receives fairly regularly; and neither Google nor Microsoft is poised to make a bid hovering around $200 million (in fact, most every possible acquirer I spoke to said $60 million to $80 million was a more likely price if Digg were ever sold).

This is not to say that Digg could not suddenly get an amazing offer too good to refuse, from any of the parties and others, as any company could.

And Google is a natural bidder and has to be interested in Digg, of course, given that it needs to add more to its Google News product and likes highly distributed plays like Digg.

In addition, given that it did a guaranteed ad deal with Digg last year and might have to have alternatives if its Yahoo bid fails, Microsoft is the other obvious candidate to own a site like Digg.

But, once again (these Digg sale rumors surface with wearying regularity, much like the colds I get from my kids), Digg is not embroiled in this fantastic kind of Spy-vs.-Spy battle between Google and Microsoft, news of which rocketed around the Web and took on a life of its own.

In other words: While Digg has been to visit the Googleplex and Microsoft to discuss all sorts of linkups, including recently, along with several others over the last two years (Yahoo, for example), from partnerships to traffic deals that could–of course–all lead to a possible acquisition, its executives have not been waiting by the fax machine for offer bids to start rolling in of late.

Here’s the duller truth, in contrast to sexier rumormongering: Of course, larger companies are interested in high-growth Internet phenoms like Digg, whose massive distribution on the Web via Digg buttons and a motivated audience is impressive.

The user-generated news-discovery site that has grown quickly to 27 million unique monthly visitors and 250 million page views is poised to be profitable this year.

While some debate its helpfulness at generating monetizable traffic, when Digg points to a story, huge audience spikes quickly follow.

That’s attracted attention from larger companies, from both the Web and media worlds, all of whom have been calling the still-small start-up (50 employees) for a getting-to-know-you chat.

“Everyone is looking to see if they can copy Digg, partner with Digg, acquire Digg,” said one person familiar with the company.

That has been both a blessing and a distraction to the company, I would imagine, as it takes the eye off the ball of actual executing on a day-to-day basis. As I have seen with a lot of companies I have covered, acquisition interest can be a heady experience and not always in a good way.

And there have been some actual offers to buy Digg over time, although not recently, and none has reached even close to the kind of fire-alarm state that TechCrunch loudly rang last week.

The report was so over the top that it prompted Digg CEO Jay Adelson to refute it on the company’s blog.

He wrote: “Normally our policy is to not comment about things like this, but this morning’s rumors about a bidding war involving Google and Microsoft have created such a stir we feel compelled to tell you all directly that they are completely inaccurate.

“Sorry to burst any drama theories, but they aren’t true. We remain focused on improving Digg and rolling out great features.”

Of course, that was not enough of a denial for TechCrunch, which stood by its source, and then spun a somewhat convoluted conspiracy theory about Adelson’s post: “Digg may have had an angry Microsoft and Google on its hands this morning after this post, leading Jay to comment on this where they usually wouldn’t. Jay certainly wouldn’t say anything untrue in his post, but there’s a lot he isn’t saying in that post, too.”

But that’s kind of like trotting out the old when-did-you-stop- beating-your-wife courtroom ploy. Quick, Della, parachute in Perry Mason to get Adelson to confess to his alleged crime!

Sure, Adelson could have been even more specific, denying Digg was for sale completely and once and for all, I guess. But no public or private company would ever do such a imbecilic thing, as everyone is ultimately for sale, and saying otherwise would have also been completely inaccurate.

And, it goes without saying, no one wants to be completely inaccurate, do they?

Please see this disclosure related to me and Google.

Kara Visits The Lobby in Hawaii

Kara Swisher — Thu, 25 Oct 2007 16:14:58 +0000

I am at a new conference organized by August Capital’s David Hornik called The Lobby on the Big Island of Hawaii.

It is thick with Web 2.0 players, all here to interact and discuss issues, although without a formal program that is so typical of most Internet conferences.

In other words, the schmoozing in the halls is front and center, an interesting cut-to-the-chase twist from the gadfly VC Hornik.

So what was the talk last night at the opening cocktail party? The Facebook deal, of course, with most people being alternately incredulous, dubious and in awe of the $15 billion valuation that Mark Zuckerberg snagged from Microsoft.

In general, people were worried about the impact on their own companies, most agreeing that it would make the bubble even more bubblicious and that it marked the return of that frothy but queasy feeling of the first Internet bubble when AOL somehow managed to grab Time Warner in a deal that, as it turned out, will now live in infamy.

We’ll see about that, but now it is off to some mysterious group activity all day and, at some point, natch, a beach party.

Or as Elvis sang so movingly: Clambake! Geeks going to a Clambake!

Here’s some video, featuring folks like Kevin Rose and Jay Adelson of Digg:

[ See post to watch video ]

The Children's Hour, Part 2: Can Facebook Apps Grow Up?

Kara Swisher — Wed, 10 Oct 2007 12:28:58 +0000

Yes, I meant it when I said that too much of the Facebook environment these days was like being present at a loud Wiggles concert in the kid mosh pit–and I have been there, so believe me.

Except, in the case of the hot social network, the Wiggles never ever stop wiggling. Or SuperPoking. Or Cartoonifying. Or inundating me with digital picture gifts of “giraffe love” (I could not make this up, you realize, as you can see here).

Yesterday, I did a long post on the fact that most Facebook apps, also called widgets, are startlingly juvenile and mostly banal.

My gripe was the lack of truly useful apps from either Facebook or the legions of third-party developers that it allowed onto its fast-growing platform to offer all sorts of services in the form of apps.

As I said yesterday, millions upon millions of people are downloading and using these apps, riding on the back of Facebook’s own hypergrowth to 45 million active monthly users.

Active maybe, but doing what, I wondered? A whole lot of nothing, which is the problem.

As I wrote:

And if that is all there is, can Facebook really build a viable and long-lasting business on what is essentially a bunch of games that will ultimately become wearying for users? Doesn’t it need more robust apps that actually are useful and relevant and make Facebook the service that [Facebook founder Mark] Zuckerberg has often told me was a ‘utility’?”

I have been thinking about that a lot, actually, since I started a Facebook group for our D: All Things Digital conference and our AllThingsD.com site not long ago. Not surprisingly, quite quickly, the group grew to almost 2,500 members.

We use all the group tools available to us (not much!) like: posting video and text from the daily site and posting photos from D and allowing discussions (mostly moribund as most message boards are these days). I do find the Wall feature a somewhat useful means of communication for that group.

After that, we fall right off a cliff. You can’t email your group members for events or to alert them to cool stuff, there is no version of the very amazing news-feed feature and there is no way to make it feel more interactive.

It’s like throwing a party, having everyone show up and then offering no food, drinks, music or coat check.

My hope was to create a digital version or, at least, feeling of our D conference. That event is successful, I think, because people like the big names, but mostly because people really value the interactions and the community there (also the cupcakes are most excellent at the Four Seasons Aviara).

There is none of that on our D group and there are no widgets allowed yet either in groups.

Not that I would want to subject our members to those apps, which I noted were useless to people with real stuff to do all day and in need of relevant ways to leverage an obviously viral site like Facebook.

As I wrote yesterday, do I want to SuperPoke Digg CEO Jay Adelson? No thanks!

Or do I want to Vampire Bite blogger Arianna Huffington? Maybe Gov. Arnold Schwarzenegger does, but not me.

Or perhaps do I want to pop virtual zits with former Yahoo COO Dan Rosensweig? Well, maybe that would rock!

In point of fact, I don’t exactly know what I want to do with this group. But I know I have assembled a powerful and influential group of tech’s brightest stars and I have nothing to offer them.

So I would love products from developers and from Facebook and I want them to surprise me with innovation and not har-har-de-har apps.

Because I don’t get the joke and all I know is a good social network is a terrible thing to waste.

The Children's Hour: Facebook Apps Are for Toddlers (There, We Said It)

Kara Swisher — Tue, 09 Oct 2007 18:37:08 +0000

Fine, call me a grumpy old lady, because I don’t want to pass around a toasty complex carbohydrate globally.

Right now on Facebook, I have been trying to decide what to do near on two weeks or more, after receiving a “Hot Potato” tossed to me by my old boss, Washington Post Co. CEO and Chairman Don Graham (oh, yes–his family also owns a key hunk of the legendary paper, too).

For those who don’t know what a digital Hot Potato is: It is a widget (also called a third-party app) created by a very nice-looking group of guys at a design outfit called Hungry Machine for the Facebook platform.

“You have to pass it on and watch it travel around the world. 27,012 other people did!”

With all due respect to Don Graham (who is a mentor of Facebook founder Mark Zuckerberg, by the way), Hungry Machine and all world-trotting spuds, I don’t think so.

I get it, I get it. Millions upon millions of people are downloading and using these apps, part of a very clever ecosystem Zuckerberg unleashed in late May.

Under the scheme, widget-makers got to go wild on Facebook and Facebook got to offload a chunk of its feature development onto others. (See my movie below of the f8 launch, including a somewhat awkward Zuckerberg on the stage.)

At that event, a 750-person jeans-and-T-shirt-clad army of Web developers gathered at the San Francisco Design Center’s Concourse and began to create even more apps in earnest with an all-night hackathon.

“Until now, social networks have been closed platforms,” said Zuckerberg at the event, calling on outside developers to integrate their applications into the service. “Today, we’re going to end that.”

But, so far, as popular as those apps have become, what Zuckerberg and the widget-makers have wrought is mostly silly, useless and time-wasting and the kazillion users of these widgets are pretty much just acting like little children.

I never thought I would call the often frivolous AOL back in the day–very simply, a Neanderthal version of Facebook–a mature offering in comparison.

While I will admit when I am not chewing nails that a lot of these apps are somewhat fun, I can’t help but ask myself that lyric from the old Peggy Lee classic: “Is that all there is?”

And if that is all there is, can Facebook really build a viable and long-lasting business on what is essentially a bunch of games that will ultimately become wearying for users? Doesn’t it need more robust apps that actually are useful and relevant and make Facebook the service that Zuckerberg has often told me was a “utility”?

While Facebook–with a cleaner and more strict look and a better navigation–is surely less goofy than rival MySpace for anyone over 12 years old, and its video, photo and email features are nice, the vast majority of its apps are still mostly as dumb as a box of hammers.

Maybe they will attract scads of ads and maybe not, but first consider the top apps on Facebook right now.

Slide’s No. 1 Top Friends, which has 2.94 million daily active users, lets you “add a box of up to 32 of your BFFs to your profile.”

Wheeeee! Paris Hilton forever!

Not to pick on them particularly, as I think they are great developers (see my post on Slide here), but Slide’s FunWall (2.2 million) lets you add lots of bells and whistles to what is essentially graffiti-writing.

And its SuperPoke (1.16 million) is just plain rude when it notes, “Why just poke when you can pinch, hug, tickle, pwn [sic] or even throw sheep?”

Sheep? SuperPoking? I’d be getting queasy if I were a Procter & Gamble media buyer right about now!

iLike (694,000), with its music recommendations and sharing, is all well and good, but also light.

And X Me from Rock You (673,000)? “Tired of just poking? X Me opens up a whole new world of action-based communication, for example, ‘Hug Her, Slap Him, Tickle Them!’”

Oh no, you didn’t.

What else? Vampires. Werewolves. Naughty Gifts. An Honesty Box where you can say gross things in messages anonymously.

And my rececent favorite, which grew 4,107% the other day, called Pop Ur Zit!

To give you the entire feel for it, I am printing their whole reason for being below (plus this lovely cartoon above):

Another usual day…. With half-closed eyes, you are headed to the bathroom…OH MY GOD!!! It’s the Zits!!!

“Pop your zits at your friends and gross them out!! But you can also rescue (soothe) them with your favorite products. It will cool them down, relieving their stress as well as changing their biorhythm.

“See what happens every 10 hours and see what you can do by popping your friend’s zits. Zitometers will sync with your actions and time. Be aware of alerts on zitometer. Your friend’s soothing is the only way you can get rid of your zits on your face.

“You will get rewarded for being a kind soother. Your rank will go up as you soothe more people and you will get different coupons to use on hundreds of shopping malls.”

Is it just me?

No, thankfully. Wired Editor and “The Long Tail” author (who should know about this stuff) Chris Anderson wrote about the Facebook apps market in a post, which was actually a reaction to another analysis report by Tim O’Reilly.

By way of background, Anderson noted that O’Reilly’s report showed that Facebook apps were “top-heavy, with the top 84 apps of the 5,000 analyzed having 87% of the traffic,” before moving on to the obvious conclusion of why this was so:

1. The social networking on Facebook is too powerful. This is the tyranny of network effects, where viral success is the only kind and popularity snowballs into an avalanche or goes nowhere at all. That sort of herd behavior is usually a sign of an immature market.
2. Most apps are total crap. That, in turn, may say something about the whole idea of Facebook as a platform. But I’ll leave that discussion for another day.”

So, let’s discuss. And no potato-throwing, please.

Next chapter: Why I don’t really want to SuperPoke, say, Digg’s Jay Adelson, on our 2,500-person strong D: All Things Digital group on Facebook? But what else is there to do?

[ See post to watch video ]

Om Malik Is Ready for His Close-Up

Kara Swisher — Wed, 25 Jul 2007 04:01:22 +0000

What is Om Malik going to announce at his party tomorrow night at the M. H. de Young Museum in San Francisco?

Valleywag wanted to know what the well-known tech blogger was up to, so we will tell them: an online television interview and analysis show on Revision3 called “The GigaOm Show.”

Along with tech lawyer Joyce Kim (who is also sister-in-law to Jason Calacanis), the weekly show will be 10-minute talks with various tech CEOs and start-up entrepreneurs.

Malik will handle the editorial and Revision3–founded by Digg founders Jay Adelson, Kevin Rose and others–will deal with production, distribution and ad sales.

The show will also appear on Malik’s site. And the first episode will premiere tomorrow night and will either be one of three interviews already in the digital can: RealNetworks’ Rob Glaser; Seagate’s Bill Watkins; or the ubiquitous entrepreneur James Hong. Sorry to miss the festivities, of course, but congrats to Malik.

One also wonders what TechCrunch’s Michael Arrington might announce at his party Friday night at August Capital. Maybe new funding, which is reportedly in place for the tech start-up bulletin board blog.

The always-cordial David Hornik of August extended an invite to that party, but I’ll be visiting Reuters, Yahoo and a spate of other Internet companies in London, you know, doing reporting.

While I hate to miss two good Silicon Valley parties, I will raise a glass to ever-expanding blog empires from some cozy pub.