The news aggregation locality’s CEO, Jay Adelson, spelled out Digg’s drive as antidote to profitability

By Spencer E. Ante

Watch full size video:

Over the last few years, Digg has become Silicon Valley’s version of the boy who cried wolf. Like the child who warned local villagers that a wolf was in all parts of to attack his flock of sheep, potential buyers of Digg have repeatedly leaked reports that the body was about to be sold, but a sale was never consummated.

Not anymore. In each conference with BusinessWeek, Digg Chief Executive Officer Jay Adelson says the popular news aggregation Web site is no longer for demand, and the focus of the company is to build every independent employment that reaches profitability as quickly as possible. That means the four-year-old startup will dial back some of its expansion plans, in place prioritizing projects that beget revenue and utility.

Among the new efforts: The company recently started to betray ads on its RSS feeds. It is forward the verge of launching a revamped translation of its homegrown search engine that the gathering hopes will give more relevant and lucrative make inquiry advertisements. And it is within a month of closing a mete out with a mobile ad provider to sell more ads upon the body cell phones. "Now I am pressured to keep costs wise and focus more on the top-line revenue, which we really haven’t done ever," says Adelson, a 38-year-old father of three who splits his time between Dutchess County in New York, where he lives, and San Francisco, the company’s headquarters.

Wearing jeans, scuffed black leather boots, and a striped, long-sleeve shirt with the tails hanging out, Adelson described how the financial crisis led him to speed up the company’s degree of movement. In September, Digg said it had tripled revenues over the last year. In 2009, Adelson expects "one more tripling if not more." Earlier this year, Adelson wanted to reach profitability within two years. Now, he says, "it will hopefully happen within a year."

Moreover, by dint of. dint of. $28.7 million in new presume capital raised this more than September from Highland Capital Partners, Greylock Partners, Omidyar Network, and SVB Capital, Adelson says that Digg is now considering making its own acquisitions. Although Digg is not in discussions to close a conduct one’s self, Adelson says he is looking for companies to acquire. "There are Digg clones around the world in every country," says Adelson. "I could go into those markets and clean up those sites. If I needed more metropolis to do a deal, I could probably do it."

If Digg is not one longer forward the auction block, as Adelson says, the startup will be under increasing pressure to keep growing and wring a profit from its passionate community of users who post stories on the seat in continuance a variety of topics. Although the company claims it has 35 million unique users per month, unrestrained researcher comScore (SCOR) says that Digg had 16.3 million users worldwide in October 2008, up 31% from last October’s user base of 12.4 million.

Adelson stands by his figures, claiming that comScore’s panel methodology underestimates the traffic on social media Web sites. "There are 35 a thousand thousand unique users a month none matter if a body of jurors says there is," he says. "Panels are based on a unlike demographic than who comes to Digg. The panels aren’t working. I don’t think you can trust comScore’s fourth book of the pentateuch; census of the hebrews for any locality in this genre."

Adelson says his figures are based on data from Web analytics firms Omniture (OMTR) and Quantcast. Omniture does not release purchaser data. But according to Quantcast’s Web site, Digg.com claimed 21.7 the multitude global users as of Nov. 30.

While international expansion is less of a priority, Adelson says increasing engagement without interruption the site is more important than ever. Over the next few months, Digg will commence new features that the company hopes volition lure users to stick around the site. "There is probably a list of 15 to 20 things we want to do," he says. One opportunity is to make the site more genial and expose users to more easy in mind that they are likable to find appealing. If the strategy works, it could help the company make income as users click on more pages. "I’ruins rather arrive more revenue by getting people to hang out more than by the agency of serving greater quantity ads," says Adelson.

Adelson also addressed reports that he and other members of the executive team, including founder Kevin Rose, sold blockhead during the most recent round of financing. "Nobody took somewhat cash-out opportunity on the executive team that was significant," he says. "We wanted to make sure Kevin and I had extremely large stakes. We believe the upside is significantly better."