According to reports from Business Week, the social news site Digg is not doing too well financially. The results of the first three quarters of 2008 show an income of $6.4 million, while the losses are pegged at $4 million. A similar story ran last year, pegging Digg’s income at $4.8 million and losses at $2.8 million.
Currently, Digg has 70 members on the payrolls, and they hope to expand to 150 over the next year or so.
They are reported to have about 16 million worldwide unique monthly visitors and 58 million page views according to Comscore.
Quantacast on the other reports about 22.6 million unique monthly visitors.
However since Digg does not have any editorials, the main job at this site is to moderate the content being posted by users and to concentrate on community affairs. It is believed that the site can be run efficiently, with much below half the present number of employees.
So then, why the plans to expand at a time when the financial position is so poor? In fact if they reduce the staff significantly they can turn the losses into profits.
This point leads us to wonder, if Digg is secretly up to something.
Unnamed sources, associated with the company have said that development and operations engineers are working on a product, which would be similar to Google AdWords, but would allow Digg to insert relevant ads into their news stream.
Users will be able to vote on these ads, thus “ranking” them. Ads which get a higher ranking, will be placed on a higher level, and will be charged a lower rate per click.
If this product is a success, it could definitely help to generate profits. For now Digg has refused to confirm or deny the story.