Kevin Rose: Digg Turned Down $80 Million Acquisition Offer

Digg is boned. Product is at a dead end and users are losing interest in the community.<p>Meanwhile, they're funded up their ears. $40 million? For what? It's a bunch of user-submitted links and discussions. You need a couple of developers, a sysadmin, a designer, some sales guys. Am I missing any other roles?<p>100 employees for such a simple product is insane to me. I couldn't believe they topped out at that number. I am biased – I prefer small, lean teams over bloat, but come on, anyone can see this.<p>And now, yeah, they're boned. You're not going to get any significant multiple of $40 million out of that business. Boy, the investors would have been fortunate to get their money back period.<p>I guess that's just how the VC game is played.

"Rose wouldn't go into details, but said that he was getting "burned out"<p>Nail in the coffin statement there, uncommitted leadership during crisis mode is when all is lost.<p>I don't blame Rose from being burned out, bringing him back was more terrible decision making from board.

I'm shocked that the Digg board turned down $80 Million. Unless it was an overly complicated deal, that sounds like a lot more then it was / is worth.<p>The real value in Digg was always the unpaid community that powered it. Programming, I.P. and tangible assets are worth a fraction of what Digg is worth. In essence, someone offered $80m for the opportunity to put their hands on the steering wheel of the once powerful group of people who contributed, dugg and evangelized everything Kevin and crew did.<p>As Digg has proven, communities are fickle and without proper management, motivation and reward, they fail. In retrospect, neither the Digg community nor the assets it has are worth that much money. However, with a carefully crafted goal, properly motivated community and importantly a plan that includes a way to monetize the community, community based services could very well be worth $80 Million or more.

with good investors, entrepreneurs usually have a lot of leverage in sitautions like this as long as the board sees them as crucial to the company's success going forward. so i wonder how much kevin pushed it.<p>my 1990s startup got an early acquisition offer for $30M when their was only $400K in; the VC left it up to us, and we decided we wanted to build a company. a few years later we hit the wall and the board could have forced us to take a lowball offer but we decided to see it through and managed to turn things around. in the end with $16M invested, we sold to Microsoft for around $60M ... the investors were split, but the executive staff (including me) wanted to do the deal so after some discussion we did. we had great investors, of course; not sure what digg's board is like.

A lot of people are here laughing at digg for turning this down, but hindsight is 20-20.<p>Zuckerberg turned down $1Billion from Yahoo, and at least on paper is worth an order of magnitude more now.<p>At the time, digg was a leader in a new take on publishing distribution. If executed well, it could have very feasibly been worth more than $80M.

This article on digg claims it has 293 comments: <a href="http://digg.com/news/technology/digg_redesign_tanks_traffic_down_26" rel="nofollow">http://digg.com/news/technology/digg_redesign_tanks_traffic_...</a><p>After clicking "Load More" a couple times until it says there are no more comments to load, $(".comment-body").length in the firebug console says there are 104 comments. Am I missing something here or are they lying about comment counts to make the site seem more active than it actually is?

Discussion about whether the board should have accepted the offer would benefit from knowing when it was made. In Digg's "heyday" is a bit vague. 80m is a biggish bird in the hand but 20m of that was earn out and given that Google were reportedly on the verge of a 200m offer in 2008, it's not clear that whoever thought 80m was lowball was altogether insane.

I think the real story here is that he is "burned out" at Digg but excited by his angel investing. Where might that lead?

I bet the digg board are regretting the decision since the launch of v4.

This reminds me of Yahoo on one hand (should have taken the money before they started tanking!) and Etsy on the other hand (70 employees was already far too many, next they went on a VC fueled hiring spree and now have about 130). In another similar move, Etsy recently brought back their old CEO/founder, to the horror of many members who were around for the first three years.

Any estimates on the current valuation?

So i guess the BW cover was bullshit.<p><a href="http://en.wikipedia.org/wiki/File:BusinessWeek_cover_14_Aug_2006.png" rel="nofollow">http://en.wikipedia.org/wiki/File:BusinessWeek_cover_14_Aug_...</a>

can't say i'd blame him, in digg's heyday, it was likely worth a good bit more.

they need to work more on their own concept and should stop being inspired from reddit.