How Digg can double its revenue (and not piss off it's users)

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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
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.
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
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
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
- = …
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)