Digg’s Revenue Problem Possible Solution Nate Westheimer

Premise Users come to Digg to discover new content Publishers and brands desire high ranking for press releases and articles

Users come to Digg to discover new content

Publishers and brands desire high ranking for press releases and articles

The TechMeme Model Brands and publishers will pay premium eCPMs to have their “article” (or press release) show up in-line with top stories on Digg.

Brands and publishers will pay premium eCPMs to have their “article” (or press release) show up in-line with top stories on Digg.

In-line Sponsored “News” Sponsored Article: Intel Now Has More Inside: http://intel.com/

Phase 1 All sponsored articles appear to non-registered / logged-out users. Only sponsored articles “Dugg Up” appear to logged in users. Hybrid PPC + CPM model Targeted per vertical Continue to sell low-performing banners DIY ad buying

All sponsored articles appear to non-registered / logged-out users.

Only sponsored articles “Dugg Up” appear to logged in users.

Hybrid PPC + CPM model

Targeted per vertical

Continue to sell low-performing banners

DIY ad buying

Phase 2 Sponsored articles appear to all users Sponsored articles are more targeted to users Narrowed to PPC or CPM model Advertisers can target per user behavior/interest DIY ad buying & supported by sales staff Continue to sell low-performing banners

Sponsored articles appear to all users

Sponsored articles are more targeted to users

Narrowed to PPC or CPM model

Advertisers can target per user behavior/interest

DIY ad buying & supported by sales staff

Continue to sell low-performing banners

Business Assume 30M monthly uniques Assume 90% non-RUs Assume 2PVs/unique Therefore, assume 54 Million Page Views available inventory Assuming $10 eCPMs for sponsored articles (higher than banners) = $540,000 monthly revenue = …

Assume 30M monthly uniques

Assume 90% non-RUs

Assume 2PVs/unique

Therefore, assume 54 Million Page Views available inventory

Assuming $10 eCPMs for sponsored articles (higher than banners)

= $540,000 monthly revenue

= …

Additional Yearly Revenue $6,480,000 / yr (new revenue)

Cash Flow Positive $6,400,000 (existing banners) + $6,480,000 (new revenue) - $8,480,000 (operating) = $4,400,000 (profit)