• TechDirt, Monday, August 7, 2006 11:30 AM

The new Business Week cover about the founder of Digg.com leaves a lot uncovered, according to TechDirt. As much as we love charming tales about pimple-faced high school kids who created the next billion-dollar Web startup in less than 12 months, you can't call any old startup the next YouTube or MySpace. The cover in question features Digg founder Kevin Rose, looking very much the teenager. It reads: "How This Kid Made $60 million in 18 Months"--as if his company had already been sold. Actually, the article never mentions the $60 million figure again. It says that Digg breaks even at about $3 million in revenue per year, but claims "people in the know say Digg is easily worth $200 million." It doesn't mention who these people are. Or why we should believe them. But in a prepared response, Business Week says the figure (is it $60 million or $200 million?) "is not as dot-com deja vu as it sounds. YouTube, the enormously popular video site, posts similarly fledgling revenues, but some experts say it could easily fetch $500 million." Hmm--but isn't that exactly what it sounds like? We're not even sure YouTube breaks even. The article suggests that Digg will one day become a cash cow on a par with MySpace--yet MySpace's problems monetizing its content are well-documented. TechDirt says that Business Week has written the "ultimate Web2.0 hype piece without the slightest hint of skepticism about the numbers that it throws around." Digg may become profitable and be sold for a lot of money someday, but to suggest that this has already happened "is pure bubble logic."

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