Digg announces major increase in spending
Burn, baby, burn! That's the coded message in Digg CEO Jay Adelson's blog post about a "major expansion effort." The website, whose users rate and discuss news headlines, is hiring for 19 open positions, with more to come, as Digg expands internationally. Only at the end does Adelson mention how he's making this happen: $28.7 million in venture-capital financing. Coming after failed acquisition talks with Google, the financing round makes it clear that Digg is now planning to get bigger rather than sell out. It's a strange thing to celebrate.The obvious goal of the blog post is to advertise Digg's available jobs to prospective engineers. But in so doing, Adelson's alerting everyone to Digg's ever-expanding payroll expense — without talking up where the money is coming from. Digg has a sweetheart advertising deal with Microsoft, which sells ads for the site — but it hasn't found a revenue model of its own. And Digg has a management problem which will only get more obvious as the company swells. Adelson, who commutes to Digg's San Francisco headquarters from his home in upstate New York, has admitted that he's not as committed to the company as he could be, having been burnt at a previous startup, Equinix. Founder Kevin Rose, who still commands considerable respect among Digg's contentious users, has made it plain he's not interested in running a big company and taking it public. It's hard to picture Rose and Adelson staying if Digg is sincere about getting big.