Although Digg has about 35 million users registered, they are bleeding money. Although the numbers reported from BusinessWeek earlier were false according to Digg’s CEO*, the company still has yet to achieve profitability. Therefore they are laying off about 10% of their workforce, or about 7 people. However, Digg CEO Jay Adelson reported that the company will be hiring a direct sales force and head of sales to help drive profitability.
This is the first time that Digg will be building advertising support structure. Digg’s deal with Microsoft will remain, but the company also plans to create a new advertising support structure. For example, Digg Dialog is a way for the community to interact with government officials and the company would be open for sponsorship of such events.
“It is true we have been focused on growth and user features. We had this Microsoft deal to take us to profitability, and we were definitely focused on the user experience. We didn’t focus on the ramp time to break-even. We never felt there would be any challenge to monetize Digg,” stated Adelson.
*BusinessWeeek reported that last year, Digg lost $2.8 million on $4.8 million in revenue and lost $4 million on $6.4 million in revenue during the first three quarters of 2008.