Online news aggregator and social media Web site Digg.com announced plans to cut staff, hire a direct sales team and reach profitability within the year. Company CEO Jay Adelson posted the information Thursday on Digg’s in-house blog.
“As we’ve often stated over the past couple of months, given the current economic climate, we’ve made the decision to take a more conservative approach to our expansion plans and aggressively focus on reaching profitability within the year,” Adelson wrote.
The popular site, which claims more than 35 million community members, will continue its three-year partnership with Microsoft to sell advertising, as well as building on their advertising infrastructure and rolling out new features “to grow and engage the community.” However, traffic has flattened out over the last year, drawing 6.8 million U.S. unique visitors in December 2008, an increase of just 13 percent from the same period one year ago, according to Internet marketing research company comScore.
Digg plans to cut 10 percent of its 75-member staff, according to a report in The New York Times. The news comes four months after Digg netted $28 million in a third round of funding from investors such as Highland Capital Partners. “We need to start investing in areas that could counteract what looks to be a pretty bad economic climate this year,” Adelson told The Times. “The answer to having a high value is profitability as soon as possible. It’s not about phantom valuations, it’s about proving yourself with your revenues.”
The site has also had to deal with increasing competition from social networking sites such as Facebook (which it has plans to integrate with) and Twitter, a micro-blogging site. “I’m confident that with commitment and focus on these priorities, Digg will be an even stronger company in 2009 and will continue to create innovative features,” Adelson wrote. “I want to thank you all for your continued support and commitment – helping us achieve our vision of the democratization of media, and revolutionizing the way people consume and discover information online.”