Digg is the daddy of all social media sites, with its system of voting stories up or down having become the standard that all copycats have used. But, some of those copycats, Yahoo Buzz and Mixx especially, are catching up in terms of traffic and marketing potential. How do you stay ahead of the competition? Throw money at the company and see what sticks.

Digg has announced new funding of $28 million from existing venture capitalists Greylock Partners, Silicon Valley Bank and the Omidyar Network. Despite not actually making any profit as such, Digg has now raised a total of $40 million since being set up in 2004.

The new funding round was announced by CEO Jay Adelson on the official Digg blog, who also used the opportunity to spell out what some of the money would be used for. It seems that Digg has been working on a range of new features and developments over the past few months, all of which will now be funded to completion.

The first thing being done is a doubling of company staff, from the current 75 to around 150 over the next year. The company will also move to a new, larger headquarters in San Francisco.

The next will be to expand internationally. Digg claims to have 30 million unique users per month, half of which are from outside of the US (hardly surprising seeing as the Internet is a global playground). So an international growth strategy will be put in to action early on in 2009, part of which will mean more diverse language support than just English.

The Digg experience will further be personalised, while the recommendation system that is the site’s bread and butter will be expanded in to other aspects of the site. We’ve already seen this achieved spectacularly well with the launch of Digg Dialogg: an interview series which saw the questions submitted by users and then voted up or down by the site’s users.

In an exclusive interview with The New York Times to accompany the announcement, Adelson also spelled out the company’s intention to increase the accuracy and range of analytic tools available for publishing partners who use Digg buttons on their sites. This will enable these partners to more easily see which stories are resonating with the Digg community.

So, with this new round of investment and the ambitious plans being made, I guess this means that Digg won’t be sold to a larger company any time soon. There has been continuous speculation over the past couple of years of a media giant such as Google or Microsoft stepping in to acquire the company, but all talk of being acquired now seems to have passed.

Digg seems to be going from strength to strength, and that’s good for the large community of people who use the site on a daily basis. I’m sure it’s also good for Kevin Rose’s bank balance but that’s another matter entirely.

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Entry was posted on Wednesday, September 24th, 2008 at 9:39 pm under Internet, Opinion, Social Media.

Read more entries by Dave Parrack.
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