I received a rather nasty email from a reader last night upset over my Microsoft Zune review (you can see his email in the user reviews section under the name “defiler”). I might have been a little harsh on the Zune, but I stand by my score of 5.5/10, I think its a very poor product. So anyways, this reader accused me of being biased and anti-Microsoft. I had to chuckle at that. I am a Microsoft MVP for Digital Media (3 years running), our videos are featured on WindowsMedia.com (usually under the Entertainment section), and we feature our content on MSN Canada (starting next week). I like Microsoft. I will however, call it like I see it, and will never play favorites when writing a review. If it’s a bad product, then it will receive a bad score.
Worth noting, despite receiving positive reviews from the likes of Cnet and other outlets, Rob Enderle and I both saw the trouble from a mile away. Paidcontent.org has a story citing several sources that says that Microsoft Zune sales are falling fast, and it’s ranked 20th on Amazon with players from SanDisk and Apple outperforming it - as can be expected. Am I allowed to say ” I told you so”?
If you have a moment, check out CNBC.com. I love the design, simple, attractive and to the point. I hope that when the site launches it will keep the same feel.
I am a big fan of Digg; well I used to be anyways. I admit that I am drawn to the instant information that the site produces, it’s like having a news reader that only produces the best news stories. That was 6 months ago. Now the site only seems capable of producing content from unreliable blogs rather than actual credible sources. And out of the blog stories that make it to the front page it primarily consists of top ways to make money, Nintendo Wii and Apple news. The Digg community has taken over and unfortunately for Digg this is a bad thing because the stories that make it to the front page are biased, and that’s very bad for a news site.
TechCrunch has a post about Jay Adelson’s visit with Forbes, an interesting video to watch. Jay claims that the Comscore report of 1.4mm monthly uniques is way off and that the site really produces about 20mm per month. That’s a huge discrepancy. According to Jay, 70% of their readers use FireFox or RSS readers while browsing Digg content, and that is not taken into account. I have to question whether they really have 70% of their readers using FireFox though. Ultimately, if Jay cannot clear the fog, anyone really interested in acquiring the site will lose interest - and quickly. Would you spend $150mm dollars on a site that cannot produce clear accurate traffic data? Especially when that’s your only real asset.
The folks on the TechCrunch article got into a good debate about the value of Digg, and I decided to throw in my .02 cents. My response is below:
Drama 2.0 is right on the money. A real valuation takes days to perform and cannot simply be plugged into a form-field. There are multiple ways to valuate a company as well; DCF and EPITDA being the most common (look them up). There is a complex formula to all of this, revenue, growth rate, debt, projections, industry are only a few of the factors.
Let’s look at the facts though: $3MM in revenue off of 20mm monthly unique visitors is ridiculous. Digg claims they have the same traffic as some of the top news sites on the web. Do you think CNN.com, or FoxNews.com could operate their web businesses off of $3mm in revenue? Let’s get real.
And for the record, the industry average CTR for banner ads is .30, not 1%. And I can bet you that Digg is well below the industry average CTR due to a high pageviews per visitor ratio - and that is a bad thing.
Regarding technology, the only asset which Digg seems to own; it’s easy to emulate unfortunately. The real advantage they have is their traffic since they own no content, and because their stories are voted to the front page by the readers, that takes the control away from the Digg management. And that looks very bad to someone that might be interested in purchasing the site.
1) Low click-through-rate
2) Traffic you cannot control
3) Technology that is easy to duplicate
4) No actual content that you own
This does not look good for Digg. They are in a real bad situation. And of course they have investors and 20+ employees to take care of, so they need to sell the site for a large number in order to make any profit. They should have sold it once they were on the front page of Business Week.
Thanksgiving is my favorite time of the year. It gives you time to spend with your family and friends without the stress of work or other things in life. There is nothing quite like good food, family and friends, football and lounging around. Hopefully you have some people that you care about spending time with you this Thanksgiving. Best wishes.
CNN is reporting that the Apple iPhone could be here very very soon. I admit that I will be the first in line to get one, provided its a true Apple product and not just a Motorola phone that supports iTunes. Oh, and it must be compatible with the Bluetooth system in my car. 
Normally I stay away from the blogging community, but on the way to work today, my biz partner Dan and I were talking about John Miller and Jason Calacanis leaving AOL last week. One of us brought up Valleywag and the endless insults and heckling that Nick Denton has focused on the whole event, specifically towards Jason Calacanis. I am not a big Jason fan, but I will never believe in hitting a man when he is down. There is definately no honor there, and it’s just poor taste. But unfortunately that seems to be how the whole Silicon Valley blog community behaves. Dan mentioned there should be a movie about it Titled The Bitches of Silicon Valley. Brilliant idea!
ValleyWag is reporting that FM Publishing, a blog ad network, has lost Fark as a potential client, and Digg is reportedly thinking about leaving FM too. Fark has decided to let Maxim represent them instead. Is there anything FM Publishing could have done? No. Let’s face it, Maxim is a much better fit for Fark. The folks at Maxim are already big fans of Fark (look at the cool sites link to the left) so it only makes sense that they will want to rep it. Plus I am willing to bet their demographics are in-line with the online site too. Could Fark be a potential acquisition for Dennis Publishing?
Digg on the other hand would be a good fit for FM Publishing from a demographic perspective, but I am willing to bet that FM simply cannot sell enough deals to fullfill the sites massive ad inventory. Another good bet is that its hard to get advertisers for Digg. Who wants to advertise on a link site where nothing is original and you get a massive ammount of pageviews per visitor? I bet their click-through rates are very very low.