RWW’s Richard McManus beat me to it, but apparently, according to some numbers from Compete.com, Digg is actually larger than Facebook. Please note than Compete.com is a sponsor of this blog and our network of sites.
That’s shocking. No, not the sponsorship bit, the fact that Digg is larger than Facebook. Facebook is growing ferociously, we first outlined when - at current growth rates - Facebook would hit 100M users. Then, we did some number crunching and outlined that Facebook would be larger than MySpace by August 2009, which was admittedly crazy at face value, but hey, blame Excel.
The question is: if you could buy one of the two, which one would you pull the trigger on?
Digg has many clones, and ultimately I’m still not sure of its value. If it’s true that a couple of dozen of diggers control the main page, it’s utterly useless. Facebook is anything but, but the flip side is that news will always be relevant, and tools to take the power away from editors and place it in the hands of readers is priceless while everyone invariably grows out of Facebook. Trust me, they do, or should. Though what we like about Facebook is that it’s become the Database of Connections, to borrow from John Battelle’s reference to Google as the Database of Intentions.
If you could have one of the two, which one would it be?
I’ve decided to take a quick lunch break and post my thoughts on this question, as it is a very thought-provoking inquiry.
Apparently I am in the minority on this one, but I would make my bets on Facebook. It is indeed true that a very large percentage of Digg’s submitted stories are produced by a very small percentage of people, and we saw Jason Calacanis attempting to buy these people out! It seems to me that the switching costs are low for consumers of these democratic-news sites to switch to another one, and the barriers to entry are extremely low with regards to a competitor simply building another Digg clone.
Facebook, on the other hand, has a large following of a large percentage of people; 80% of the people do NOT make up 20% of the activity. Nearly 100% of the people make up 100% of the activity. The switching costs are EXTREMELY high for users of Facebook, believe it or not (why would you switch to another social networking site, unless all 1000 of your close friends did as well?). In addition, the barrier to entry is much higher for a competitor to compete effectively in the college networking space, due to the same critical mass of users that Facebook has accumlated which makes the switching costs for users so high.
With 25+ million users, Facebook could soon begin implementing their OWN version of Digg-like functions. Think of having custom news, tailored to your interest, published into your News Feed? You can then rate these stories, and these rating will dictate which and how often the stories show up on your friends’ News Feed.
Okay, lunch break is over
Bottom Line: I do not know the current market value of Digg, which would obviously assist in making my decision in the real world. If Mr. Thiel is not crazy, and Facebook IS worth $8+ billion, then perhaps a better buy would be Digg between the two. It is true that the future of news content and media is on the internet and in the hands of the consumer. However, with 25+ million active, loyal followers to Facebook, which doesn’t seem likely to drastically change in the near future, Facebook could implement their own Digg & more.
I am very surprised to see Digg garner 90% of the votes, something tells me it’s the Digg community that is voting heavily on Digg’s side, but then you would see much more than 150 votes.
Anyway, I personally think Facebook is the more dynamic of the two, ie. more upside, but indeed, if Digg was willing to sell for $150M yet Facebook’s backers want something in the multi-billions (let alone Thiel’s $8B), then indeed, maybe Digg is a better bargain.
June 21st, 2007 at 11:11 am
Ash -
I’ve decided to take a quick lunch break and post my thoughts on this question, as it is a very thought-provoking inquiry.
Apparently I am in the minority on this one, but I would make my bets on Facebook. It is indeed true that a very large percentage of Digg’s submitted stories are produced by a very small percentage of people, and we saw Jason Calacanis attempting to buy these people out! It seems to me that the switching costs are low for consumers of these democratic-news sites to switch to another one, and the barriers to entry are extremely low with regards to a competitor simply building another Digg clone.
Facebook, on the other hand, has a large following of a large percentage of people; 80% of the people do NOT make up 20% of the activity. Nearly 100% of the people make up 100% of the activity. The switching costs are EXTREMELY high for users of Facebook, believe it or not (why would you switch to another social networking site, unless all 1000 of your close friends did as well?). In addition, the barrier to entry is much higher for a competitor to compete effectively in the college networking space, due to the same critical mass of users that Facebook has accumlated which makes the switching costs for users so high.
With 25+ million users, Facebook could soon begin implementing their OWN version of Digg-like functions. Think of having custom news, tailored to your interest, published into your News Feed? You can then rate these stories, and these rating will dictate which and how often the stories show up on your friends’ News Feed.
Okay, lunch break is over
Bottom Line: I do not know the current market value of Digg, which would obviously assist in making my decision in the real world. If Mr. Thiel is not crazy, and Facebook IS worth $8+ billion, then perhaps a better buy would be Digg between the two. It is true that the future of news content and media is on the internet and in the hands of the consumer. However, with 25+ million active, loyal followers to Facebook, which doesn’t seem likely to drastically change in the near future, Facebook could implement their own Digg & more.
Put me down for Zuckerberg & Co.
- Brandon Mullins
June 21st, 2007 at 11:16 am
I am very surprised to see Digg garner 90% of the votes, something tells me it’s the Digg community that is voting heavily on Digg’s side, but then you would see much more than 150 votes.
Anyway, I personally think Facebook is the more dynamic of the two, ie. more upside, but indeed, if Digg was willing to sell for $150M yet Facebook’s backers want something in the multi-billions (let alone Thiel’s $8B), then indeed, maybe Digg is a better bargain.
June 21st, 2007 at 11:30 am
Agreed; however, you titled the post with “If you had a blank check…”
June 21st, 2007 at 2:27 pm
Just because you have a blank check does not mean you have unlimited funds…