how digg can double its revenue (and not piss off it's users)

Digg’s Revenue Problem

Possible SolutionNate Westheimer

Premise Users come to Digg to

discover new content

Publishers and brands desire high ranking for press releases and articles

The TechMeme Model Brands and

publishers will pay premium eCPMs to have their “article” (or press release) show up in-line with top stories on Digg.

In-line Sponsored “News”

Sponsored Article:

Intel Now Has More Inside: http://intel.com/

Phase 1 All sponsored articles

appear to non-registered / logged-out users.

Only sponsored articles “Dugg Up” appear to logged in users.

Hybrid PPC + CPM model

Targeted per vertical Continue to sell low-

performing banners DIY ad buying

Phase 2 Sponsored articles

appear to all users Sponsored articles are

more targeted to users

Narrowed to PPC or CPM model

Advertisers can target per user behavior/interest

DIY ad buying & supported by sales staff

Continue to sell low-performing banners

Business Assume 30M monthly

uniques Assume 90% non-

RUs Assume 2PVs/unique Therefore, assume 54

Million Page Views available inventory

Assuming $10 eCPMs for sponsored articles (higher than banners)

= $540,000 monthly revenue

= …

Additional Yearly Revenue

$6,480,000 / yr(new revenue)

Cash Flow Positive

$6,400,000 (existing banners)+ $6,480,000 (new revenue)- $8,480,000 (operating)= $4,400,000 (profit)