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In the best of times, companies like Digg with fairly massive traffic have found it difficult to actually make a profit. And Digg is a poster-child of web 2.0.

In the best of times, companies like Digg with fairly massive traffic have found it difficult to actually make a profit. And Digg is a poster-child of web 2.0. Where does that leave the others dependent on similar user-generated-content-with-a-social-angle (which would describe so many of the consumer-oriented YC companies too)? Call me pessimistic, but I just don't see how the numbers add up to profitability, even ramen profitability for most such sites. I have been in situations of ramen profitability and after a while (like 2 years) it gets tiresome. Even the most relentlessly resourceful people tend to throw in the towel and move on. This recession (depression?) looks like it will be around for a while.

pg 18y ago
Something like Digg will clearly be where a lot of people get their news. And given the network effects, it was smart to focus initially on growth. The result is that at this stage they have a site that's big and unprofitable. Bad luck for them this stage coincides with a huge recession; but few saw that coming. Except for raising/spending too much, they seem to me to have followed roughly the optimal path. You cannot do better than that. Optimal isn't always great, but it is optimal.
- axod 18y ago
  They do seem to have a lot of employees (80?) - quite a few more than Reddit. I'm guessing if they chose to they could get rid of employees, the swish office, and be profitable pretty much when they decide to, if they can't grow earnings or get acquired.